Trial Magazine

Too many people have been unable to hold wrongdoers accountable because of forced arbitration clauses that make otherwise valid claims not feasible to pursue. Others have seen justice significantly delayed or completely denied because of these one-sided, corporate-friendly tactics. Our clients’ ability to exercise their Seventh Amendment rights is critical—access to the courts ensures a fair process to remedy harms for individual clients, and it protects all Americans by holding wrongdoers publicly accountable.

But forced arbitration enables corporations and employers to break the law and never be held accountable. Instead of going before a judge and jury, consumers and workers must bring their claims to a secret proceeding before a private arbitrator who is not answerable to the public. This process strips people of their rights and lets corporations funnel claims against them into a system that is rigged in their favor.

Forced arbitration is an issue that affects all of our practices. These unfair clauses are buried in the fine print of millions of everyday contracts—including nursing home admissions forms, credit card “agreements,” online click-through “terms and conditions,” health care contracts, and employee handbooks.

Typically, the consumer or employee has no power to negotiate. Corporations choose the private arbitrator, the rules for the forced arbitration, the location where the arbitration proceeding will occur, and the payment terms. Because arbitrators depend on repeat business, they strongly favor corporations and employers.

Corporations know that most people will simply give up when faced with forced arbitration, so they have virtually no incentive to follow the law or to quickly and fairly handle claims. Many people still don’t know about forced arbitration, but almost everyone is affected by it—from applying for a job, purchasing or using a product, or signing up for a service.

Thankfully, after more than a decade of work supported by AAJ Public Affairs and others, in September 2019 the U.S. House of Representatives, in a bipartisan vote (225-186), passed the landmark Forced Arbitration Injustice Repeal (FAIR) Act. The FAIR Act would render forced arbitration clauses for employment, civil rights, consumer, and antitrust disputes invalid and unenforceable. It would restore workers’ and consumers’ rights to individually and collectively hold corporations and employers accountable in open court.

We must stay focused on ending forced arbitration once and for all, and every AAJ member can help achieve this by supporting the legislation and sharing your clients’ stories.

Elise R. Sanguinetti is a founding partner of Arias Sanguinetti Wang & Torrijos in the San Francisco Bay Area and a past president of AAJ. She can be reached at elise@aswtlawyers.com.