Like, it’s such a punch in the face of the user when it’s hidden in the terms of service. It’s so scummy it hurts. I still can’t believe corporations are getting away with avoiding going through the legal system like that.
Here are the cons of an arbitration clause:
- You lose the right to class action lawsuits
- It’s less public than going through the legal system
It should not be allowed to be part of the terms of service for a product. But two consenting parties should be allowed to use it.
Ya. No mandatory arbitration.
It definitely should be. Employers should not have the ability to just decide they don’t want to be sued and pretending like the employees have a choice in the matter is a joke. Most of them. Are wage salves and can’t afford to be fired for not agreeing to forced arbitration.
As a general rule, arbitration is a great tool for multiple parties to resolve a dispute without going all the way to trial.
The issue isn’t with arbitration on it’s face, but forced arbitration as dictated by a single party.
And of it’s forced through the AAA is even worse.
Here’s the thing. In the US, it isn’t the law. When they passed the federal arbitration act, it was written to apply to businesses who mutually agree to arbitration. It was meant to stop companies that agreed to arbitrate and then sued after they didn’t like the arbitration results.
The supreme court one day just randomly decided it applies outside of that context. Even though it wasn’t written to do that and hadn’t done so for decades.
So in my personal opinion, it is outlawed, our court is just evil extremists. Thanks for coming to my tedtalk.
The supreme court one day just randomly decided it applies outside of that context. Even though it wasn’t written to do that and hadn’t done so for decades.
What’s the supreme court decision you just mentioned? I couldn’t find it on Google.
I’m familiar with it through Circuit City Stores, Inc. v. Adams, which is about employment arbitration. The majority argued that it was the “natural reading” that the Federal Arbitration Act intended to cover employment arbitration agreements. The dissent goes through the legislative history of the Act to establish that no one in 1925 intended the federal arbitration act to cover employment agreements. There is probably a lot more caselaw to this Act than just employment arbitration, but that’s what my 1L paper was on.
Dissent quoted below:
The history of the Act, which is extensive and well documented, makes clear that the FAA was a response to the refusal of courts to enforce commercial arbitration agreements, which were commonly used in the maritime context. The original bill was drafted by the Committee on Commerce, Trade, and Commercial Law of the American Bar Association (ABA) upon consideration of “the further extension of the principle of commercialarbitration.” Report of the Forty-third Annual Meeting of the ABA, 45 A.B.A. Rep. 75 (1920) (emphasis added). As drafted, the bill was understood by Members of Congress to “simply provid[e] for one thing, and that is to give an opportunity to enforce an agreement in commercial contracts and admiralty contracts.” 65 Cong. Rec.1931 (1924) (remarks of Rep. Graham) (emphasis added).2 It is no surprise, then, that when the legislation 126 was first introduced in 1922,3 it did not mention employment contracts, but did contain a rather precise definition of the term “maritime transactions” that underscored the commercial character of *1315 the proposed bill.4 Indeed, neither the history of the drafting of the original bill by the ABA, nor the records of the deliberations in Congress during the years preceding the ultimate enactment of the Act in 1925, contain any evidence that the proponents of the legislation intended it to apply to agreements affecting employment.
. . .
The irony of the Court’s reading of § 2 to include contracts of employment is compounded by its cramped interpretation of the exclusion inserted into § 1. As proposed and enacted, the exclusion fully responded to the concerns of the Seamen’s Union and other labor organizations that § 2 might encompass *129 employment contracts by expressly exempting the labor agreements not only of “seamen” and “railroad employees,” but also of “any other class of workers engaged in foreign or interstate commerce.” 9 U.S.C. § 1 (emphasis added). Today, however, the Court fulfills the original—and originally unfounded—fears of organized labor by essentially rewriting the text of § 1 to exclude the employment contracts solely of “seamen, railroad employees, or any other class of [transportation] workers engaged in foreign or interstate commerce.” See ante, at 1311. In contrast, whether one views the legislation before or after the amendment to § 1, it is clear that it was not intended to apply to employment contracts at all.
++Cir. City Stores, Inc. v. Adams++, 532 U.S. 105, 125–26, 121 S. Ct. 1302, 1314–15, 149 L. Ed. 2d 234 (2001)
No. Arbitration can save all parties time and money in many types of disputes. It’s often reasonable for a negotiated contract between near-peer parties to contain an arbitration clause.
What should be illegal is arbitration clauses in non-negotiable terms of service.
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That’s the crux of it. How are arbiters ever going to be truly independent when repeat businesses necessarily only ever comes from one half of their arbitration? CorpoCorpInc selects your arbitration company for 200 arbitrations a year. How many of those cases does CorpoCorpInc lose before they decide to go with a different arbitrator?
So maybe if you want to make a law, find a way to break that implicit feedback loop.
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Let’s say you’re some slob disputing a $65 charge or some shit and they are a multi-billion dollar corporation that does thousands of these a year. Even if you object to their pick, whomever you mutually decide to go with has a chance at repeat businesses with CorpoCorpInc, but very unlikely to have repeat business with you.
Edit: I honestly don´t know anything about the details of arbitration, so if you’d like to tell me what safeguards are in place, I’m all ears.
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Because the wrong people are in power to allow it to happen.
You lose the right to class action lawsuits
I love when I get a coupon in the mail and lose my right to sue the company, whereas the offending company pays basically some small fine and the lawyers go home with a huge payday.
But I agree, forced arbitration sucks, I’m glad that it’s unenforceable here (other than in B2B agreements)
it is. contracts can not make you go against the law.
meh, that only applies to what, 5% of the world’s population?
It’s legal because people agree to it as part of entering a contract. And as scummy as you or I may believe it to be, people still enter into such contracts, and courts have not ruled them unconscionable.
people agree to it
Hardly an agreement if it’s predicated on access to a service, particularly if the service is a utility, a monopoly, or a cartel.
If every vendor uses uniform language as a means of mitigating their own collective liability, the agreement is functionally coerced.
I agree, but I also think we need to be aware of what we agree to when entering service agreements. Certainly for something like an ISP for which there is often a monopoly there may not be much of a choice, but even when you do have a choice, how often do you actually read what you’re agreeing to? We have the option to try to vote with our wallets, but instead we’ve collectively just continued to sign up for services that have arbitration agreements. If companies see only token resistance to such contracts then they’re not going to be deterred.
even when you do have a choice, how often do you actually read what you’re agreeing to?
You don’t bother precisely because it’s an enormous amount of work for no discernable benefit.
What are you doing to do? Not rent a car or fly on a plane? Not own any electronics or motorized vehicles? Not rent an apartment? Not use software?
We have the option to try to vote with our wallets
Do we? What good is money if we can’t spend it?
I suppose you’re right. We are powerless and griping on the internet is the only catharsis available to us!
It’s helpful to understand what you actually have control over, rather than confusing good fortune for savvy decision making.
It’s also helpful to understand when you’re not completely powerless, rather than confusing complacency for inevitability.
Very important to know the difference and be clear eyed about it
