Forced Arbitration Clauses Are Everywhere, Here’s What You Should Know
Would you know a forced arbitration clause if you saw it?
Chances are the answer is no. How many of us, when we are handed a contract, actually take the time to run the language by an attorney before we sign on the dotted line?
Be aware that they may, if they haven’t already, pop up in contracts with credit cards, cell phones, bank accounts, student loans, employment, nursing homes, home building, auto loans, healthcare providers, business franchises, cable and internet providers, and more.
What are forced arbitration clauses, anyway?
Forced arbitration clauses, now used by a growing number of companies, prevent a wronged party from bringing a case to court and are now found in over 56% of employment contracts. Instead, the dispute must be settled in secret arbitrations, usually by an arbitrator chosen by the company.
Sadly, the statistics paint a pretty damning picture of this issue:
- American companies that include forced arbitration clauses and class action waivers in employment contracts increased to nearly 50 percent in 2018.
- U.S. legal disputes using forced arbitration skyrocketed 467% between 2021 and 2022.
- The American Association for Justice found that in 2020, employees who were forced into arbitration were awarded money in just 1.6% of cases, which proves that arbitration favors corporations.
Forced Arbitration Hurts Those Who Are Already Victims
The Jinks family wanted to sue their father’s memory care facility after he was viciously attacked while sleeping with the lid of a toilet seat by another resident. However, a hidden loophole in their father’s care contract called for forced arbitration.
Legal advocates estimate that as many as 90 percent of large nursing home chains in the U.S. now include arbitration agreements in their admissions contracts.
This fine print prevents employees from suing companies in court for discrimination, sexual harassment, and even assault and prohibits victims from speaking publicly about their ordeals. It can also prevent harassers from facing public or legal consequences, opening the door for serial and long-term harassment.
And because of this, our most vulnerable citizens are at risk with no legal recourse.
The Tide is Starting to Turn With Forced Arbitration
In March of 2022, Congress passed and the President signed a groundbreaking bipartisan bill that banned employers from forcing workers to resolve sexual assault and harassment complaints using arbitration.
This law requires that prospective plaintiffs, not the defendants, choose whether to litigate their sexual assault or harassment claims in court or through arbitration. Individuals are no longer forced into arbitration even if they previously signed an agreement limiting their legal remedies to arbitration only. Also, employees may choose to bring suit individually or through a class-action lawsuit, regardless of whether the individual signed an agreement waiving their right to collective legal action.
While efforts to ban all forced arbitration clauses have failed so far, the 2022 bill helped open the door to banning the clauses in certain discrimination cases. A bipartisan bill called the Protecting Older Americans Act of 2023 has advanced in the U.S. House, calling for a ban on forced arbitration in cases that involve age discrimination.
What’s Next? The Fight for Your Legal Rights Isn’t Over
The fight for your legal rights isn’t over! Forced arbitration clauses are still everywhere. Fair Arbitration Now is a resource that helps consumers determine whether certain industries include forced arbitration clauses in their contracts. If you’ve signed a forced arbitration agreement and want to know your rights, or wish to discuss specifics of your case in a free consultation with an experienced Tucson personal injury lawyer, please contact us today.