About Arbitration

So what's the big deal? Well, it's like this. As an American citizen, you are guaranteed the right to take a company that violates the law and harms you, to court. You are entitled to haul them before a jury of other citizens, and hold them accountable under the law.

This precious right is enshrined in the 7th Amendment to the U.S. Constitution.

This right to protect your own interests in a court of law is HUGELY important. Without it, many companies feel like they can get away with just about anything. Even engaging in criminal activity that robs millions of people of their hard-earned dollars. (Like Wells Fargo.) Even committing criminal acts like engaging in sexual harassment or assaulting people.

But many corporations now deny U.S. citizens their Constitutional rights by forcing them to sign them away, in order to obtain services, products, or employment. This happens whenever you sign a contract that contains an "arbitration clause" -- often buried deep in the fine print. Those clauses say that you surrender your rights, and instead of being able to take the company to court, you are forced to submit to a privatized "arbitration" system that is paid for by -- you guessed it. The company that did you wrong. It's basically a kangaroo court, and the dice are loaded in the company's favor. They can sue you, but you can't sue them.

Plus unscrupulous corporations can hide a lot of secrets through forced arbitration, which is usually conducted in secret, unlike a court of law, where the public and the news media have access. That makes it easy for crooked companies to keep engaging in illegal activity, over and over again, without the glare of unfavorable publicity.

Because of forced arbitration, you lose your constitutional rights when you open a bank account with a bank like Wells Fargo, or when you get a cell phone, or visit a doctor, or buy a car from a car dealer. Arbitration clauses have become so common, it's getting rare to be able to do anything involving a corporation without giving up your rights.

U.S. Senator Chuck Grassley, Republican from Iowa
Even conservative Republicans have said that forced arbitration is unfair. For example, U.S. Senator Chuck Grassley, a Republican from Iowa, who is Chairman of the Senate Committee on the Judiciary, presented a bill in Congress to restore car dealers' freedoms, so they could sue giant auto manufacturers in court. Then he said:

"When mandatory binding arbitration is forced upon a party, for example when it is placed in a boiler-plate agreement, it deprives the weaker party the opportunity to elect another forum. As a proponent of arbitration I believe it is critical to ensure that the selection of arbitration is voluntary and fair. The purpose of arbitration is to reduce costly, time-consuming litigation, not to force a party to an adhesion contract to waive access to judicial or administrative forums for the pursuit of rights under State law.

"This legislation will go a long way toward ensuring that parties [car dealers] will not be forced into binding arbitration and thereby lose important statutory rights. I am confident that given its many advantages arbitration will often be elected. But it is essential for public policy reasons and basic fairness that both parties to this type of contract have the freedom to make their own decisions [whether to sue or not] based on the circumstances of the case." 1
1) Statements on Introduced Bills and Joint Resolutions, United States Senate, June 29, 2001. Statement by Senator Grassley of Iowa.
Here's what happened to one consumer, Jon Perz, who was forced to surrender his rights when he bought a used car from a car dealership in San Diego, CA. Businesses often claim arbitration is quicker than going to court. But because of forced arbitration, he had to wait over 8 years to get justice. Meanwhile he couldn't drive his car because it was too unsafe.

Many more people have had nightmarish experiences because of forced arbitration. Wells Fargo says it has changed its evil ways, but still continues to deny its victims their constitutional right to their day in court.

Read more:

New York Times: "Arbitration Everywhere, Stacking the Deck of Justice"

New York Times: In Arbitration, a "Privatization of the Justice System"

Take Justice Back: Arbitration Clause Turns College Dream into Nightmare

Fair Arbitration Now: website