Forced Arbitration Clauses, Jury Trials, and Justice


Forced Arbitration Clauses, Jury Trials, and Justice

In our last post, we discussed the new report published by the American Association for Justice (AAJ) entitled “Worst Corporate Conduct of 2017.”  Included in its Most Greedy list was FOX News, for its “$50 Million One Year Bill for Sexual Harassment”  ( page 8 of the report.)

FOX News’ Forced Arbitration Clause and Senate Bill to End It

One of the key factors in the FOX News matter: the “forced arbitration clauses” found in the contracts signed by employees of the company.  The FOX News arbitration clause imposed a “gag order” on the employee’s ability to discuss claims against the company with anyone (like the media) as well as preventing the employee from filing a lawsuit in civil court under either state or federal law.

This month, Senator Kirsten Gillibrand of New York has introduced a bill entitled “Ending Forced Arbitration of Sexual Harassment Act of 2017” to the United States Senate.  You can follow S-2203 online here (as of the date of this post’s publication, it was pending before the Senate Committee on Health, Education, Labor and Pensions).  (A similar bill is floating through the House of Representatives.)

This proposed legislation targets only arbitration clauses in employment agreements.  There is debate on how wide it may impact employment agreements, too: will it eventually end all forced arbitration clauses in contracts signed by employees, or just sexual harassment claims?  It’s too soon to know; for  details, read “The Ending Forced Arbitration of Sexual Harassment Act May Apply to More Than Sexual Harassment,” published in the National Law Review on December 22, 2017.

Forced Arbitration Clauses Deny Justice to Accident Victims

Sadly, these arbitration clauses are found in more than employment contracts.  Today, most everyone (from teenagers to elders) has one or more contractual clauses that can deny them the right to take their case to court and have their cause heard by a jury of their peers.

This is because many contracts that are signed today have crafty arbitration clauses buried in the contract language. You can find arbitration clauses in most cell phone contracts, for instance. 

Public Citizen has a long and shocking list of companies and corporations that have these forced arbitration clauses in their agreements.  They include:

  • Telecommunications: ATT, Sprint, T-Mobile, Verizon
  • Health Insurance: Anthem Blue Cross Blue Shield, Kaiser Permanente
  • Nursing Homes: Carrington Place Care Center, Covenant Health, Driftwood Rehab, Kindred Nursing

Companies try their best to get these forced arbitration clauses protecting their bottom lines whenever they can.  Consumer Reports tells the story of General Mills inserting forced arbitration clauses into its online coupons.  Anyone that was hurt ingesting one of its food products was arguably giving up their right to sue for damages simply by using a manufacturers’ coupon in the purchase.  Fortunately, General Mills responded to the public outcry of this sneaky tactic by removing the clause from their coupons.

What is a Forced Arbitration Clause? A Forfeiture of Rights

All too often, these forced arbitration clauses are placed into paperwork that consumers must sign in order to get the goods or services offered by the company.  (Or as a condition of employment, they must sign a standard employment agreement containing the language.)

Many don’t know what the language means, or they don’t feel they have a choice if they are aware of its impact. 

Waiver of Basic Constitutional Right to Trial

The forced arbitration clause is designed to deny the victim his right to take their claims to court.  Instead of having their case heard in a public forum before a judge and jury, the arbitration clause forces their claim to be presented to an “arbitrator” in a private arbitration forum.

This means that the injury victim cannot present his case in a public trial before a state court judge.  There will not be public hearings or the ability of the media and the public to access evidence and witnesses and facts.  There will be no jury.  There will be no jury verdict.  And in most cases, there will be no appeal. 

Arbitration Process Favors the Greedy Company Not the Accident Victim

Usually, these are one-way streets.  If the company wants to file suit, then the arbitration clause will not bar it from going down to the courthouse.  It’s just a tactic to protect the company from civil actions.

They’re also slanted to favor the company.  Most of these arbitration forums are in the business of arbitration.  They call it “alternative dispute resolution.”  They may look at the company as a repeat client, especially if the company has lots of legal issues and injury claims asserted against it.  Guess who they’ll be more interested in pleasing?

And they charge things like big fees just to file the arbitration claim (much higher than the filing fee at the local clerk’s office for a civil lawsuit).

Finally, arbitration allows for all sorts of manipulations by the corporation.  They’re private determinations, not open to public, so there is less chance of being caught doing bad things.  No one can go and review the file in arbitration like they can at the clerk’s office.  Also, results are usually under “confidentiality clauses” so even after the arbitrator has made a decision, it will be difficult to catch any wrongdoing.

Waiver of Right to Injury Damages

The most disturbing factor in many forced arbitration clauses is how it blatantly bars the right to justice for injury victims.  In many of these arbitration clauses, there is language that the consumer or client is formally waiving their legal right to sue for negligence or personal injury damages.

The arbitration clause works to protect the company from serious injury and wrongful death claims being asserted in a lawsuit based upon things like defective products, fraudulent practices, or safety violations.

They work to bar the right to a jury trial in serious matters, like injury victims in a nursing home where the resident’s agreement contains a forced arbitration clause, or a dorm resident whose contract includes a forced arbitration clause that denies the right to a jury trial of negligent security resulting in rape, etc.

Fighting Arbitration Clauses

It is possible to challenge the validity of arbitration clauses.  Things like the language used in the contract as well as the size of the font and more can be argued to void the provision and allow the claims to be heard in the public and constitutional forum of the local courthouse.

And it’s important to fight for the constitutional right to a jury trial of your injury claims.  Jury trials bring justice to the individual and serve the public interest of awareness of the wrongdoing.  There is also the possibility of class actions and punitive damages in civil courts that are avoided by defendants in arbitration.

If you or a loved one have been injured and are faced with an arbitration clause problem, then you may need to investigate the possibility that you can still get before a jury in a civil lawsuit.  Let’s be careful out there!

 

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