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Forced Arbitration: Corporations Opting Out of Justice and Fairness

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Washington, DCThere are two distinct messages to be taken away from the whole debacle of forced binding arbitration: 1) The basic ideals of our forefathers are going to hell in a hand basket, and 2) Equality is dead.

How could anyone watch the video below and think otherwise?

Alliance for Justice (AFJ), producer of the film, is a national association of environmental, civil rights, mental health, women’s, children’s and consumer advocacy organizations in the USA. It’s been around for a while - 1979 - and has some pretty influential friends.

Not the least of these is Robert Reich, who hosts Lost in the Fine Print. Currently serving as Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California, Berkeley, Reich has served three Presidents and was the 22nd US Secretary of Labor in the Clinton Administration from 1993 through 1997.

So what is forced binding arbitration?

In a nutshell, it’s a contractual cause, usually well-buried in the fine print of any contract that holds that the signatory waives any and all rights to pursue a dispute through the courts. Instead, a dispute has to be settled through an arbitration process that one assumes would be neutral and without bias.

However, that doesn’t appear to be the case, either. There are reports of defendants - the retailer, manufacturer, corporation or entity against which a consumer has a dispute - holding the right to select their own arbitrator, set the parameters of the process and driving what should be an unbiased process, dictating the outcome in the end.

The plaintiff, for lack of a better word, doesn’t stand a chance.

This is America? Land of the free and protector of civil rights?

“[Forced arbitration] is really an exit clause from the civil justice system - and people aren’t aware that they’re even entering into these contracts.” says Deepak Gupta, an appellate attorney who appears in the film.

“It actually leads to the establishment of a ‘for profit’ system of justice,” says Hank Johnson (D-Georgia), another participant who lent his voice to the film.

Paul Bland, an attorney and the Executive Director of Public Justice, a rights advocacy group, appears in the film as well and says forced arbitration clauses are literally everywhere - from the cars you buy to the nursing home into which you place your loved ones for care. “[Forced arbitration cases] are just omnipresent in American society now.” Including your employment contracts, student loan agreements, banking relationships and even pre-nuptial agreements!

The devil is really in the details

It is a sad reality that most Americans don’t read the fine print. They don’t have time. Or there’s too much of it. Or it’s so small (fine print is aptly described…), they just can’t read it. The language is often several grade levels above their degree of comprehension.

Besides, say you, “I’m just buying a car.” Or, “I’m putting my mother in a nursing home, and yes there is this contract with a myriad of fine print, but there are fresh flowers everywhere and the people seem really nice…”

Don’t bet on it.

The inherent problems with fine print lend to the complexity of the issue at hand. Basically, you may have trouble comprehending the language, or it may be so small and there may be so much of it that you have to book a week off work and cozy up with a magnifying glass just to get through it. But as long as it is there, it’s legal. The manufacturer or service provider does not have to make it easy for you.

What’s more, if it’s in the fine print and you signed it, then you are generally bound to it regardless of how unfair it might be.

The video, expertly hosted by Reich, is rife with incomprehensible examples of real people and the heartbreak, frustration and sheer unfair treatment they have been shown when forced arbitration is, well - forced upon them without their knowledge.

Affecting many sectors, this has nonetheless been a growing phenomenon in the nursing home industry. Elder-care facilities have been increasingly turning to arbitration clauses in contracts as a means to stem the costs of litigation and the size of compensation awards. Nursing homes will tell you they do this in the face of cuts in funding from Medicaid and Medicare, and that such mitigation of legal and liability costs is the only way to ensure quality care.

Bland suggests that more than 90 percent of nursing homes in the country subscribe to these clauses.

Is it unfair to the consumer? Consumer advocates say, yes. Does it contravene long-held rights and statutes of Americans? Yes. Is it legal? As long as it’s in the fine print and you’ve agreed to it, yes.

Is it a level playing field?

Absolutely not.

Americans are beginning to fight back

In recent months and years there have been a few court cases where arbitration clauses have been successfully challenged. With nursing homes, for example, judges have ruled that arbitration is more appropriate for nuts-and-bolts issues, and not for issues of alleged neglect, health, harms or abuse suffered by a resident. The point has also been made in recent decisions that a clause or waiver has to be fully understood by the individual agreeing to it; otherwise the lack of understanding invalidates the waiver.

No matter. The reality of it all is that forced arbitration is at such a high prevalence, it’s almost impossible to find a contract without it.

And again, says the AFJ, it’s the company telling you that you do not have a right to sue. “You can’t take us to court. Your dispute will be arbitrated with an arbitrator that we choose and we pay for, thus working for us.”

How do you think they’re going to rule on your case?

In about 94 percent of the cases, arbitration awards find for the company.

“You have two parties in a dispute, and then the more powerful party writes a contract where they pick who’s going to decide the dispute, they pick the rules under which the dispute is going to be decided and they rig those rules in their favor. It’s just an incredibly unfair system.”

With forced binding arbitration, major corporations are simply opting out of the justice system in a way that everyday Americans have no right to or would ever think of doing. Yet not only are they doing so, they’re getting away with it.

What can you do?

Read the fine print. Don’t agree to something you’re not sure about or don’t understand. Watch the video. Form your own opinions, and then make your voice heard.

The court of public opinion is perhaps the most powerful court there is…


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Posted by

More doctors are making their patients sign an Arbitration clause. My boyfriend has needed back surgery, for a year now, but can't find a surgeon, because he refuses to sign the clause. What are Doctors afraid of? It's like they're saying,"I'm not any good at what I do and know I'll mess up, so I don't want you to be able to sue me for the mistakes I'm going to make, but trust me." Where are our constitutional rights? Since when did the Medical Industry take over Washington? Politicians have become spineless behind the big money of medical lobbyist and their lies.

Posted by

I fear for my dads safety my Nannas dead so I have to watch over him now I'm traumatized by what happened to my father and great friend homeless senior citizens all alone with out 3 times the rent or loved ones who can look after them all alone in the mean streets I'm afraid for there health and safety and not having enough money for adequate care

Posted by

this happened to me when i bought a lemon car from rock chevroet i put a lot of money in repairs to get the car running i had to put a radiator ,replace a gasket leaking oil,sensor switch dashboard etc the dealership refused to help the bbb wasnt any help either so what good are they

Posted by

I find this very interesting - Lets just say there are ways. First of all a piece of paper does not have to be signed as is. Cross out what you do not agree with. I have done this . And witnessed a friend of mine do this when she was hiring someone for an event. She simply crossed out what she did not agree to. As I said I did that myself too. Now later on I was presented papers that I supposedly signed - they were not. How did I know - because what I was being shown did not have the lines crossed out. How anyone thinks they can pull that with a legal document I do not know. Having a witness helps of course.

Posted by

Talking about unfairness, try this one. I live in a mobile home park and they have dug up my cement driveway 3 times, without replacing the cement and most of the time leaving part of the cement around for me to pick up. Why because the management did not have plans to where the sewer was all they knew that it was under my carport area, which was cemented. Now it is a disaster. The last time they dug it up was for a different reason to put in new meters again just dug up the cement never replaced it.
Later on early a few months they did say they would replace it with asphalt, the job management had hired in the streets at the time were breaking apart and did not to want to having it look worse then it all ready did. They were not going to cover the entire driveway so it would have been part asphalt and part cement. I pay space rent but I guess other than paying I have no rights. What a shame, I am sick of all of the injustice they dish out, but am of low income and can't afford to move. Now they have the nerve to pass on a few street light that should of be installed years ago and making the tenants pay for this over a period of 10 years. They keep coming up with more rules but nothing is ever done for those who are paying rent. There is no one to protect the rights of people who own their own mobile homes and pay space rent in these parks.
Yes I know all about arbitration, you might as well just give the party suggesting what they want because that is exactly what happens, you can refer it to an ambush.

Posted by

The video should have cc for the hearing impaired. As for signing a nursing home contract it is impossible to refuse because it is difficult to get into a nursing home under Medicaid. To refuse is to being refused a bed. And asking corporations to voluntarily take out the clause is a waste of time/effort.


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