10 ms·

Why isn't forced arbitration illegal? You're effectively agreeing to renounce to your rights to sue a company. Seems odd that US laws allows that. Or, is the

Why isn't forced arbitration illegal? You're effectively agreeing to renounce to your rights to sue a company. Seems odd that US laws allows that. Or, is the clause only that arbitration has to be attempted but not binding to the fact that an agreement may be reached? This case would seem far less evil.

anth_anm 8y ago
because of shitty court rulings that make them legal. They also can't be banned at the state level.
nimish 8y ago
The Federal Arbitration Act, and a SCOTUS favorable to corporate interests.
dvtrn 8y ago
Why isn't forced arbitration illegal? We're getting there: https://www.fisherphillips.com/resources-alerts-kentucky-becomes-first-state-to-prohibit-mandatory https://www.fisherphillips.com/resources-alerts-kentucky-bec... States still hold a lot of chips when it comes to rulemaking over what is and isn't allowed w/rt employment types and agreements. It's a bit murky though, when it comes to Federal power weighing in on employment contracts at the state level (outside of things you've come to expect like protected classes/EEOC, workplace safety, and accomodations/accessibility for workers with physical impairments).
- anth_anm 8y ago
  I thought that SCOTUS already ruled that the federal arbitration act gives states little power in this?
  - dvtrn 8y ago
    Oh? You may be entirely right, if that's the case, this fact completely eluded me and I'll take the correction.
dtech 8y ago
Arbitration comes from agreements on how to settle future disputes being legal [1]. If two company agree to settle through a chess match between their CEOs instead of suing, by all means let them. This is obviously problematic in cases where there is a significant power discrepancy (employee-employer, producer-consumer etc), or where arbitrators are paid by a single party. Despite this, US suspreme court has held that they are still valid [2] [1] https://en.wikipedia.org/wiki/Federal_Arbitration_Act https://en.wikipedia.org/wiki/Federal_Arbitration_Act [2] https://en.wikipedia.org/wiki/Epic_Systems_Corp._v._Lewis https://en.wikipedia.org/wiki/Epic_Systems_Corp._v._Lewis
- sand500 8y ago
  Sure but let anyone do voluntary arbitration not forced.
  - whiddershins 8y ago
    It’s voluntary whether or not to agree ahead of time to be bound by a conflict resolution method should such conflict arise in the future.
  - anth_anm 8y ago
    If two companies of comparable size want to agree to arbitrate any disputes in a contact, that should be allowed. It saves massive amounts of time and money. The problem is the disparity between the parties involved when it's a company and an individual. Forced arbitration also bans class action lawsuits, which weakens individuals even further.
    - CharlesColeman 8y ago
      I think forced arbitration should only be legal in actively negotiated contracts (i.e. both parties were active in writing and modifying all the terms), where the proposing party disclosed the implications in plain language, and where agreeing to it was entirely optional for either party (sort of like GDPR consent). I think those conditions would effectively exclude it from consumer contracts while permitting it when both parties understand and want it.
briandear 8y ago
> You're effectively agreeing.. You are agreeing. As an adult, the choice to agree or not agree to conditions of a private transaction seem to be a fundamental liberty. If people didn’t agree and it affected recruitment, then companies would respond accordingly. Also, without arbitration, conceivably that could result in a lower offered salary to offset the risk of litigation. Given that the vast majority of employees never care about suing, the higher salary is a better outcome most of the time. Banning forced arbitration is necessarily going to increase employee costs to a company, which means less money to pay people much in the same way higher health costs affect salaries as well. I don’t agree with forced arbitration, but making it illegal disrupts the freedom of employees and employers to engage in agreements how they see fit. Without arbitration, you get a lower salary, all else being equal, which is essentially a form of insurance against the possibility that you might sue. Some people might be ok with that, but that choice should be between the employee and the employer; it isn’t government’s place to get involved.
- TomVDB 8y ago
  You could make the same argument for almost any regulation. And we'd all be worse for it.
- anth_anm 8y ago
  Companies shouldn't be allowed to have you sign away your constitutional rights like this.
- hath995 8y ago
  For another data point consider https://www.reuters.com/article/legal-us-otc-uber/forced-into-arbitration-12500-drivers-claim-uber-wont-pay-fees-to-launch-cases-idUSKBN1O52C6 https://www.reuters.com/article/legal-us-otc-uber/forced-int... Even if you willingly accept the forced arbitration clause you still may not get justice because the company doesn't want to pay for it!
- deogeo 8y ago
  > the choice to agree or not agree to conditions of a private transaction seem to be a fundamental liberty. A fundamental liberty that eventually leads to all corporations offering you the same choice. Accept it, or go bankrupt and homeless. Or were you able to negotiate terms with you bank, ISP, smartphone vendor, or Microsoft if you're on windows? Laws restricting which contracts are legal, are just a form of collective bargaining of the voters. Or if you prefer, laws specifying which contracts will be enforced by the State. You're free to try and enforce the rest on your own, like a true libertarian.
Symmetry 8y ago
Averaged across distinct contracts (as opposed to contract-instances) forced arbitration is a very good thing. If Google and Microsoft get into a dispute about the meaning of some agreement they signed they it's far better that they get some third party to quickly resolve the issue than that they have to spend years and millions of dollars in legal fees fighting it out in the courts. It's only when these agreements are imposed rather than negotiated that they become abusive.
- JohnFen 8y ago
  > Averaged across distinct contracts (as opposed to contract-instances) forced arbitration is a very good thing. Forced arbitration is a very good thing for the employers. It's not a good thing for the employees, who are effectively signing away a huge swath of rights.
  - sjjshvuiajhz 8y ago
    The parent may agree with you, but they said that in a somewhat obscure way. I believe their point is that companies have many distinct contracts with other companies (good) that contain arbitration clauses, and that employers have a smaller number of distinct contracts with employees (bad) that are duplicated thousands of times over.
  - Symmetry 8y ago
    Employers generally use the same contract for all their employees so employer/employee forced arbitration contracts are only a minority of contracts. If a contract is between two corporations each with their own lawyers to review the contract that giving up of their rights to sue each other is actually a good thing. But that depends on the arbitrator being acceptable to each and desiring repeat business from each. It's the employer/employee situation where only one side has lawyers involved in selecting the arbitrator that the situation becomes abusive.
- xiphias2 8y ago
  You mean arbitration is a good thing. Yes it is. Forced arbitration is taking away the option of going to court.
CobrastanJorji 8y ago
The idealistic take is that the United States is a country that maximizes freedom, which includes the freedom to enter into whatever contracts you wish. You aren't forced to take a job that requires you to waive your right to sue; you're choosing to do it. If it were too important, capitalism suggests that another employer would show up, offer you a little less pay and no arbitration clause, and everybody would work for that company instead. In practice, this isn't how life works, but that's the theoretical reason. The real reason is that pro-corporate politicians hold power and corporations want arbitration agreements to be legal, largely because courts are more expensive, bad PR, and are less likely to work out in their favor.
- deleted 8y ago
  [deleted]
fuzz4lyfe 8y ago
Mostly because people don't care enough. Lets say you are a stanch Democrat, a Republican candidate runs with Republican policies plus a plan to end forced arbitration. Do you vote for him? For most voters the answer appears to be no. Small government conservatives vote for large government projects that benefit their donors and friends, on the other side a lot of talk about the minimum wage and socialized healthcare but none if it ever materializes when they have a majority. Then the next election comes and you vote for the same people who failed you the first time, because the other people are trying to kill toddlers and force schoolchildren to become transgender or are all secretly racists out to build death camps for gay people or some other insane claim fed to you by a corporate news network or comedy show that happens to be owned by someone who benefits from the status quo. Don't worry though, keep drinking Pepsi, you are part of the resistance TM brought to you by Viacom. Why doesn't anything ever get fixed? We keep putting the people who failed back in charge. Nobody in Congress today should have a seat in the next election until something actually changes.
deleted 8y ago
[deleted]
interlocutor 8y ago
>Why isn't forced arbitration illegal? The US government was "of the people, by the people, and for the people." Now it is of/by/for big corporations. Forced arbitration is a whole-scale privatization of the justice system. Americans are actively being deprived of their right to justice, see: https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html https://www.nytimes.com/2015/11/02/business/dealbook/in-arbi...
deleted 8y ago
[deleted]
0x262d 8y ago
because we live in a dictatorship of capital

anth_anm 8y ago

because of shitty court rulings that make them legal. They also can't be banned at the state level.

nimish 8y ago

The Federal Arbitration Act, and a SCOTUS favorable to corporate interests.

dvtrn 8y ago

Why isn't forced arbitration illegal? We're getting there: https://www.fisherphillips.com/resources-alerts-kentucky-becomes-first-state-to-prohibit-mandatory https://www.fisherphillips.com/resources-alerts-kentucky-bec... States still hold a lot of chips when it comes to rulemaking over what is and isn't allowed w/rt employment types and agreements. It's a bit murky though, when it comes to Federal power weighing in on employment contracts at the state level (outside of things you've come to expect like protected classes/EEOC, workplace safety, and accomodations/accessibility for workers with physical impairments).

anth_anm 8y ago
I thought that SCOTUS already ruled that the federal arbitration act gives states little power in this?
- dvtrn 8y ago
  Oh? You may be entirely right, if that's the case, this fact completely eluded me and I'll take the correction.

dtech 8y ago

Arbitration comes from agreements on how to settle future disputes being legal [1]. If two company agree to settle through a chess match between their CEOs instead of suing, by all means let them. This is obviously problematic in cases where there is a significant power discrepancy (employee-employer, producer-consumer etc), or where arbitrators are paid by a single party. Despite this, US suspreme court has held that they are still valid [2] [1] https://en.wikipedia.org/wiki/Federal_Arbitration_Act https://en.wikipedia.org/wiki/Federal_Arbitration_Act [2] https://en.wikipedia.org/wiki/Epic_Systems_Corp._v._Lewis https://en.wikipedia.org/wiki/Epic_Systems_Corp._v._Lewis

sand500 8y ago
Sure but let anyone do voluntary arbitration not forced.
- whiddershins 8y ago
  It’s voluntary whether or not to agree ahead of time to be bound by a conflict resolution method should such conflict arise in the future.
- anth_anm 8y ago
  If two companies of comparable size want to agree to arbitrate any disputes in a contact, that should be allowed. It saves massive amounts of time and money. The problem is the disparity between the parties involved when it's a company and an individual. Forced arbitration also bans class action lawsuits, which weakens individuals even further.
  - CharlesColeman 8y ago
    I think forced arbitration should only be legal in actively negotiated contracts (i.e. both parties were active in writing and modifying all the terms), where the proposing party disclosed the implications in plain language, and where agreeing to it was entirely optional for either party (sort of like GDPR consent). I think those conditions would effectively exclude it from consumer contracts while permitting it when both parties understand and want it.

briandear 8y ago

> You're effectively agreeing.. You are agreeing. As an adult, the choice to agree or not agree to conditions of a private transaction seem to be a fundamental liberty. If people didn’t agree and it affected recruitment, then companies would respond accordingly. Also, without arbitration, conceivably that could result in a lower offered salary to offset the risk of litigation. Given that the vast majority of employees never care about suing, the higher salary is a better outcome most of the time. Banning forced arbitration is necessarily going to increase employee costs to a company, which means less money to pay people much in the same way higher health costs affect salaries as well. I don’t agree with forced arbitration, but making it illegal disrupts the freedom of employees and employers to engage in agreements how they see fit. Without arbitration, you get a lower salary, all else being equal, which is essentially a form of insurance against the possibility that you might sue. Some people might be ok with that, but that choice should be between the employee and the employer; it isn’t government’s place to get involved.

TomVDB 8y ago
You could make the same argument for almost any regulation. And we'd all be worse for it.
anth_anm 8y ago
Companies shouldn't be allowed to have you sign away your constitutional rights like this.
hath995 8y ago
For another data point consider https://www.reuters.com/article/legal-us-otc-uber/forced-into-arbitration-12500-drivers-claim-uber-wont-pay-fees-to-launch-cases-idUSKBN1O52C6 https://www.reuters.com/article/legal-us-otc-uber/forced-int... Even if you willingly accept the forced arbitration clause you still may not get justice because the company doesn't want to pay for it!
deogeo 8y ago
> the choice to agree or not agree to conditions of a private transaction seem to be a fundamental liberty. A fundamental liberty that eventually leads to all corporations offering you the same choice. Accept it, or go bankrupt and homeless. Or were you able to negotiate terms with you bank, ISP, smartphone vendor, or Microsoft if you're on windows? Laws restricting which contracts are legal, are just a form of collective bargaining of the voters. Or if you prefer, laws specifying which contracts will be enforced by the State. You're free to try and enforce the rest on your own, like a true libertarian.

Symmetry 8y ago

Averaged across distinct contracts (as opposed to contract-instances) forced arbitration is a very good thing. If Google and Microsoft get into a dispute about the meaning of some agreement they signed they it's far better that they get some third party to quickly resolve the issue than that they have to spend years and millions of dollars in legal fees fighting it out in the courts. It's only when these agreements are imposed rather than negotiated that they become abusive.

JohnFen 8y ago
> Averaged across distinct contracts (as opposed to contract-instances) forced arbitration is a very good thing. Forced arbitration is a very good thing for the employers. It's not a good thing for the employees, who are effectively signing away a huge swath of rights.
- sjjshvuiajhz 8y ago
  The parent may agree with you, but they said that in a somewhat obscure way. I believe their point is that companies have many distinct contracts with other companies (good) that contain arbitration clauses, and that employers have a smaller number of distinct contracts with employees (bad) that are duplicated thousands of times over.
- Symmetry 8y ago
  Employers generally use the same contract for all their employees so employer/employee forced arbitration contracts are only a minority of contracts. If a contract is between two corporations each with their own lawyers to review the contract that giving up of their rights to sue each other is actually a good thing. But that depends on the arbitrator being acceptable to each and desiring repeat business from each. It's the employer/employee situation where only one side has lawyers involved in selecting the arbitrator that the situation becomes abusive.
xiphias2 8y ago
You mean arbitration is a good thing. Yes it is. Forced arbitration is taking away the option of going to court.

CobrastanJorji 8y ago

The idealistic take is that the United States is a country that maximizes freedom, which includes the freedom to enter into whatever contracts you wish. You aren't forced to take a job that requires you to waive your right to sue; you're choosing to do it. If it were too important, capitalism suggests that another employer would show up, offer you a little less pay and no arbitration clause, and everybody would work for that company instead. In practice, this isn't how life works, but that's the theoretical reason. The real reason is that pro-corporate politicians hold power and corporations want arbitration agreements to be legal, largely because courts are more expensive, bad PR, and are less likely to work out in their favor.

deleted 8y ago
[deleted]

fuzz4lyfe 8y ago

Mostly because people don't care enough. Lets say you are a stanch Democrat, a Republican candidate runs with Republican policies plus a plan to end forced arbitration. Do you vote for him? For most voters the answer appears to be no. Small government conservatives vote for large government projects that benefit their donors and friends, on the other side a lot of talk about the minimum wage and socialized healthcare but none if it ever materializes when they have a majority. Then the next election comes and you vote for the same people who failed you the first time, because the other people are trying to kill toddlers and force schoolchildren to become transgender or are all secretly racists out to build death camps for gay people or some other insane claim fed to you by a corporate news network or comedy show that happens to be owned by someone who benefits from the status quo. Don't worry though, keep drinking Pepsi, you are part of the resistance TM brought to you by Viacom. Why doesn't anything ever get fixed? We keep putting the people who failed back in charge. Nobody in Congress today should have a seat in the next election until something actually changes.

deleted 8y ago

[deleted]

interlocutor 8y ago

>Why isn't forced arbitration illegal? The US government was "of the people, by the people, and for the people." Now it is of/by/for big corporations. Forced arbitration is a whole-scale privatization of the justice system. Americans are actively being deprived of their right to justice, see: https://www.nytimes.com/2015/11/02/business/dealbook/in-arbitration-a-privatization-of-the-justice-system.html https://www.nytimes.com/2015/11/02/business/dealbook/in-arbi...

deleted 8y ago

[deleted]

0x262d 8y ago

because we live in a dictatorship of capital