Date:May 13, 2016
Dean Cole’s family tried holding a Minnesota nursing home accountable in court after he died of neglect, but they were forced into arbitration where the truth was hidden from the public. His story here.
Tia thought she was taking a step forward when she became a manager-in-training at electronics giant Circuit City. Instead she endured months of sexual harassment by her boss, who at one point exposed his genitals to her. He was also captured on video grabbing Tia’s hand and parading her around the store as she tried to escape.
But the worst was yet to come. When Tia filed a sexual harassment claim against the chain, her lawsuit was thrown out of court because of a legal time bomb in her employment contract called a forced arbitration clause. Circuit City went out of business while Tia was in arbitration and her case was dropped.
According to the NH injury attorneys at the Law Office of Manning & Zimmerman PLLC, Tia is among a growing number of Americans learning about forced arbitration clauses the hard way. Thousands of businesses, from credit card companies, banks and investment firms to cell phone providers, schools and nursing homes, are inserting legalese into employment contracts and service agreements called “forced,” “binding” or “mandatory arbitration.” When something goes wrong – and in some cases terribly wrong – the customer, renter, homeowner, resident, patient, employee, etc., is forced into arbitration. And that’s when the bomb goes off!
Individuals almost always lose to businesses in arbitration (97 percent of the time according to a 2007 Public Citizen report) because arbitrators are hired and hand picked by the offending businesses. Decisions from the arbitration proceedings are secret, and there is no appeal. Most forced arbitration clauses also include a ban on class-action lawsuits as well, preventing consumers from joining forces to fight wrongdoing. A recent investigative series by the New York Times called forced arbitration “a far-reaching power play orchestrated by American corporations,” and quoted state judges who called it a “get out of jail free” card.
The use of forced arbitration clauses is a relatively new tactic developed by a Wall Street-led coalition of credit card companies and retailers. Their goal, according to interviews with coalition members and court records, was simple: find a way to legally insulate businesses from lawsuits. Consumers and advocacy groups eventually cried foul and challenged the use of forced arbitration clauses and the ban on class-action lawsuits. But in 2011 and again in 2013, the U.S. Supreme Court upheld forced arbitration. With the floodgates now open, the use of forced arbitration clauses exploded far beyond the financial services industry and is now found in everything from daycare and dog sitting services to cable television and funeral homes.
You can learn how to identify arbitration clauses before you sign a contract or click the little box next to “I agree to these terms and conditions.” You can then take your business elsewhere. However, this option isn’t always practical if you want cell phone service, for example, or need a new job. Your other option is to support efforts by some lawmakers, government agencies and consumer advocacy groups to stem the tide of forced arbitration. Here’s a few:
If you have suffered an injury due to another’s negligence, contact the NH injury attorneys at the Law Office of Manning & Zimmerman PLLC at (603) 624-7200. As always, initial consultations are free.