3 ms·

Got it, so, in theory this sets the groundwork for a class action lawsuit?

sagarm 6y ago
Robinhood probably has a binding arbitration clause in their contract that prohibits users from joining a class action lawsuit, no?
- hansvm 6y ago
  Yes, and the extent that matters depends how much people care. Uber was nickel and dimed by a billion dollars in arbitration fees (significantly more than an expected class action valuation) -- the binding arbitration clause cuts both ways.
  - giobox 6y ago
    It’s about more than just the cash cost though. In many jurisdictions court cases decisions can create legally binding precedent. Arbitration typically does not, a critical advantage when Uber was very busy trying to make sure courts the world over never decided drivers are employees etc. Arbitration could never really make that distinction binding, risk a court might.
    - hansvm 6y ago
      That's a fair point. Mildly off-topic: What do you think about alternative systems (e.g. UBI) which decouple safety nets from employment? I'm still young and naive, but it seems like we could avoid the whole legal morass of contractor vs hourly employee vs salaried employee who must be paid for extra hours worked vs "real" salaried employee, state constitutional amendments requiring 7/8 supermajorities to overturn, having your health records privy to your employer, having to pay 2x (even accounting for employer contributions) for worse health coverage if you're not employed by _somebody_, and all the other garbage in our current system (forgive the USA-centric view).
      - giobox 6y ago
        I have a lot of opinions on this, too much for a comment really! At root, legal systems in many western countries only really classify workers as employee/contractor vs self employed etc. The law has not caught up with modern working practices for the new type of gig-economy worker we have. I think a third class that lands halfway between employee and contractor needs to be legally recognized in many places - something that has some benefits and risks from both. Making this new class of worker is an extremely politically loaded decision - do they get holidays? do they get benefits? etc etc and that is really where the difficulties in fixing this start. In most western legal systems this would require some really major legislation to fix well too, and would be attacked by all sides along the way. It's just so hard to put right.
- jstummbillig 6y ago
  You can put a clause in your contract that prohibits someone from using specific legal action at your discretion? That sounds wild so I am interested. What is the justification for this? How could anyone basically preemptively and effectively exempt themselves from specific legal action regardless of wrongdoing? What would happen if the other party tried anyway?
  - frockington1 6y ago
    I would guess that since Robinhood has been found guilty of misleading customers it wouldn't be too difficult to say they were negotiating in bad faith. Note: This is complete arm chair lawyering with no real world knowledge
  - bigwavedave 6y ago
    Oh, this is extremely common in the boilerplate of almost every single contract and ToS I've read in my adult life (IANAL, just referring to the contracts I've signed or chosen not to sign that I've come across). If you look at something like the contract for your credit card, I guarantee you'll find a clause entitled "Arbitration", "Mediation", or something akin to that where it basically says "If something bad happens, you give up your right to sue us and instead agree to binding arbitration by a mediator of our choice." As for what would happen if one party tried to sue the other anyway, I think it would depend on the nature of the grievance. Again, IAN[even_close_to_being]AL.
    - sagarm 6y ago
      These class action waivers began to completely take over after DirectTV vs Imburgia was decided in 2016: https://www.jonesday.com/en/insights/2016/01/us-supreme-court-rules-in-favor-of-arbitration-clauses-and-classarbitration-waivers-in-consumer-contracts https://www.jonesday.com/en/insights/2016/01/us-supreme-cour... An increasingly extreme Supreme Court has repeatedly expanded the ability of employers and service providers, including ISPs, to prohibit class actions in their contracts. Even retailers now attempt to compel their customers into forced arbitration.
  - ashtonkem 6y ago

Robinhood probably has a binding arbitration clause in their contract that prohibits users from joining a class action lawsuit, no?

hansvm 6y ago
Yes, and the extent that matters depends how much people care. Uber was nickel and dimed by a billion dollars in arbitration fees (significantly more than an expected class action valuation) -- the binding arbitration clause cuts both ways.
- giobox 6y ago
  It’s about more than just the cash cost though. In many jurisdictions court cases decisions can create legally binding precedent. Arbitration typically does not, a critical advantage when Uber was very busy trying to make sure courts the world over never decided drivers are employees etc. Arbitration could never really make that distinction binding, risk a court might.
  - hansvm 6y ago
    That's a fair point. Mildly off-topic: What do you think about alternative systems (e.g. UBI) which decouple safety nets from employment? I'm still young and naive, but it seems like we could avoid the whole legal morass of contractor vs hourly employee vs salaried employee who must be paid for extra hours worked vs "real" salaried employee, state constitutional amendments requiring 7/8 supermajorities to overturn, having your health records privy to your employer, having to pay 2x (even accounting for employer contributions) for worse health coverage if you're not employed by _somebody_, and all the other garbage in our current system (forgive the USA-centric view).
    - giobox 6y ago
      I have a lot of opinions on this, too much for a comment really! At root, legal systems in many western countries only really classify workers as employee/contractor vs self employed etc. The law has not caught up with modern working practices for the new type of gig-economy worker we have. I think a third class that lands halfway between employee and contractor needs to be legally recognized in many places - something that has some benefits and risks from both. Making this new class of worker is an extremely politically loaded decision - do they get holidays? do they get benefits? etc etc and that is really where the difficulties in fixing this start. In most western legal systems this would require some really major legislation to fix well too, and would be attacked by all sides along the way. It's just so hard to put right.
jstummbillig 6y ago
You can put a clause in your contract that prohibits someone from using specific legal action at your discretion? That sounds wild so I am interested. What is the justification for this? How could anyone basically preemptively and effectively exempt themselves from specific legal action regardless of wrongdoing? What would happen if the other party tried anyway?
- frockington1 6y ago
  I would guess that since Robinhood has been found guilty of misleading customers it wouldn't be too difficult to say they were negotiating in bad faith. Note: This is complete arm chair lawyering with no real world knowledge
- bigwavedave 6y ago
  Oh, this is extremely common in the boilerplate of almost every single contract and ToS I've read in my adult life (IANAL, just referring to the contracts I've signed or chosen not to sign that I've come across). If you look at something like the contract for your credit card, I guarantee you'll find a clause entitled "Arbitration", "Mediation", or something akin to that where it basically says "If something bad happens, you give up your right to sue us and instead agree to binding arbitration by a mediator of our choice." As for what would happen if one party tried to sue the other anyway, I think it would depend on the nature of the grievance. Again, IAN[even_close_to_being]AL.
  - sagarm 6y ago
    These class action waivers began to completely take over after DirectTV vs Imburgia was decided in 2016: https://www.jonesday.com/en/insights/2016/01/us-supreme-court-rules-in-favor-of-arbitration-clauses-and-classarbitration-waivers-in-consumer-contracts https://www.jonesday.com/en/insights/2016/01/us-supreme-cour... An increasingly extreme Supreme Court has repeatedly expanded the ability of employers and service providers, including ISPs, to prohibit class actions in their contracts. Even retailers now attempt to compel their customers into forced arbitration.
- ashtonkem 6y ago