Just about everything seems to come with fine print these days. Most of us probably don’t take the time to read it all. However, within that fine print is probably an arbitration clause that requires any dispute to be subject to what is known as binding arbitration.
What is Arbitration?
Arbitration is a form of dispute resolution, which takes place outside of a courtroom, where an independent third party makes a final, binding decision about a dispute. That third party is called an arbitrator and is different from a judge.
What is Forced Arbitration?
Forced arbitration is when an agreement or contract includes a clause that requires the parties to take any disputes to arbitration. When this happens, you are forced to give up your right to be heard in court. Corporations will often include provisions in these clauses that allow the corporation to choose the arbitrator and location of the meeting, as well as requiring the other party to pay all the costs associated with the arbitration.
There is also what is known as voluntary arbitration. This is exactly what is sounds like. It is when both parties agree to submit their dispute to an arbitrator and to be bound by the decision. Voluntary arbitration can be an effective and efficient way to solve disputes, but the key is that the parties choose to resolve their dispute this way.
Why Do You Need to Know About Forced Arbitration?
Forced arbitration clauses can be found in all kinds of agreements, including:
- New employment contracts
- Cell phone agreements
- loan applications
- employee handbooks
- website terms of service
- summer camp contracts
- school field trip permission forms.
Forced arbitration is a way for corporations to make equality legislation, which is supposed to guarantee citizens fundamental rights, unenforceable. This legislation includes Title VII of the Civil Rights Act of 1964 and 1991, the Lilly Ledbetter Fair Pay Act of 2009 and the Family and Medical Leave Act of 1993. These laws guarantee protection from employment discrimination, fair pay, and the ability to take leave for medical and family issues including maternity leave. However, forced arbitration is the exception to the rule. This type of arbitration is especially harmful to women’s rights, which these laws are in place to protect, because corporations use it to avoid accountability when they violate citizens’ 7th amendment rights by cutting off access to courts. Forced arbitration tramples on the character, courage, and commitment of the advocates who fought to pass the important laws protecting women’s rights.
What Can You Do?
Contact your U.S. Senators and Representatives and encourage them to co-sponsor and support the Arbitration Fairness Act of 2013 (AFA) to stop forced arbitration. Also, be sure to read the fine print before you sign on the dotted line.