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A good quote from the article that neatly summarizes the issue: “Companies thought they were getting out of liability altogether,” by adding arbitration clause

by pwg 5y ago

A good quote from the article that neatly summarizes the issue: “Companies thought they were getting out of liability altogether,” by adding arbitration clauses, said Chicago lawyer Travis Lenkner, whose firm filed the majority of the Amazon claims. “Now they’re seeing exactly what they bargained for, and they don’t like it.”

deleted 5y ago
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Animats 5y ago
Read the actual judgement.[1] "The employer here, DoorDash,faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order." Also in that order is DoorDash trying to force drivers to switch from the American Arbitration Association (which is generally considered legit) to some off-brand arbitration company with whom DoorDash had cut a deal. Then DoorDash wanted to seal the details of that deal, which had come out at trial. The judge said no. The American Arbitration Association is trying to keep from being a tool of big companies to oppress consumers and customers. If a contract requires arbitration under AAA consumer rules, the AAA will allow the customer to opt for small claims court, instead.([2], p. 15.) That's why so many EULAs now call for arbitration under the commercial rules, which are intended for bigger disputes. But the AAA charges the company a substantial up-front fee for commercial arbitrations. Which is how DoorDash got into trouble here. [1] https://aboutblaw.com/ONJ https://aboutblaw.com/ONJ [2] https://www.adr.org/sites/default/files/Consumer-Rules-Web.pdf https://www.adr.org/sites/default/files/Consumer-Rules-Web.p...
MikeTheGreat 5y ago
This is a great quote, and it does summarize things nicely. One quibble about the quote: companies didn't bargain for this, they imposed it. At no point did they ask for, or negotiate for, or bargain for this. They said "Here's what we're offering, take it or leave it" But the main point is 100% valid - companies thought they were getting out of liability altogether.
- paulgb 5y ago
  > Here's what we're offering, take it or leave it Technically, most companies do sneak in a way to opt out in their ToS, in order to bolster their claim that you “accepted” it if you don't happen to read that part of the ToS. I've successfully opted out of a number of arbitration clauses that way, though.
  - pseudalopex 5y ago
    That's more recent. And many companies don't.
  - jquery 5y ago
    Yep. When I was hired by my previous employer, I used this to opt out of arbitration for pay disbutes.
  - meatmanek 5y ago
    Some companies (for example, Wealthfront) have that phrasing in their ToS, but then when you actually try to opt out of arbitration, they threaten to close your account. This gives you a choice of using their service and not being able to sue, or being able to sue but not use their service.
- paxys 5y ago
  FYI "getting more than you bargained for" is a commonly used expression. It doesn't have to mean there was actual bargaining.
- revel 5y ago
  We shouldn't celebrate too early on what appears to be a largely technical mistake. It's just a matter of time until the language is cleaned up and the issue goes away for the companies. We need long term structural fixes to address forced arbitration
  - kmeisthax 5y ago
    It's not entirely technical. The law that allows binding arbitration, and it's associated caselaw, says that parties that impose binding arbitration are also financially responsible for the filing fees of aggrieved parties that want to engage in arbitration. If you don't pay those fees, then the binding arbitration clause is null and void and your counter-parties are free to sue in court. This is specifically because binding arbitration isn't supposed to grant corporations sovereign immunity. It's just to provide an alternative to litigation for people who want it.

by pwg 5y ago

deleted 5y ago

[deleted]

Animats 5y ago

Read the actual judgement.[1] "The employer here, DoorDash,faced with having to actually honor its side of the bargain, now blanches at the cost of the filing fees it agreed to pay in the arbitration clause. No doubt, DoorDash never expected that so many would actually seek arbitration. Instead, in irony upon irony, DoorDash now wishes to resort to a class-wide lawsuit, the very device it denied to the workers, to avoid its duty to arbitrate. This hypocrisy will not be blessed, at least by this order." Also in that order is DoorDash trying to force drivers to switch from the American Arbitration Association (which is generally considered legit) to some off-brand arbitration company with whom DoorDash had cut a deal. Then DoorDash wanted to seal the details of that deal, which had come out at trial. The judge said no. The American Arbitration Association is trying to keep from being a tool of big companies to oppress consumers and customers. If a contract requires arbitration under AAA consumer rules, the AAA will allow the customer to opt for small claims court, instead.([2], p. 15.) That's why so many EULAs now call for arbitration under the commercial rules, which are intended for bigger disputes. But the AAA charges the company a substantial up-front fee for commercial arbitrations. Which is how DoorDash got into trouble here. [1] https://aboutblaw.com/ONJ https://aboutblaw.com/ONJ [2] https://www.adr.org/sites/default/files/Consumer-Rules-Web.pdf https://www.adr.org/sites/default/files/Consumer-Rules-Web.p...

MikeTheGreat 5y ago

This is a great quote, and it does summarize things nicely. One quibble about the quote: companies didn't bargain for this, they imposed it. At no point did they ask for, or negotiate for, or bargain for this. They said "Here's what we're offering, take it or leave it" But the main point is 100% valid - companies thought they were getting out of liability altogether.

paulgb 5y ago
> Here's what we're offering, take it or leave it Technically, most companies do sneak in a way to opt out in their ToS, in order to bolster their claim that you “accepted” it if you don't happen to read that part of the ToS. I've successfully opted out of a number of arbitration clauses that way, though.
- pseudalopex 5y ago
  That's more recent. And many companies don't.
- jquery 5y ago
  Yep. When I was hired by my previous employer, I used this to opt out of arbitration for pay disbutes.
- meatmanek 5y ago
  Some companies (for example, Wealthfront) have that phrasing in their ToS, but then when you actually try to opt out of arbitration, they threaten to close your account. This gives you a choice of using their service and not being able to sue, or being able to sue but not use their service.
paxys 5y ago
FYI "getting more than you bargained for" is a commonly used expression. It doesn't have to mean there was actual bargaining.
revel 5y ago
We shouldn't celebrate too early on what appears to be a largely technical mistake. It's just a matter of time until the language is cleaned up and the issue goes away for the companies. We need long term structural fixes to address forced arbitration
- kmeisthax 5y ago
  It's not entirely technical. The law that allows binding arbitration, and it's associated caselaw, says that parties that impose binding arbitration are also financially responsible for the filing fees of aggrieved parties that want to engage in arbitration. If you don't pay those fees, then the binding arbitration clause is null and void and your counter-parties are free to sue in court. This is specifically because binding arbitration isn't supposed to grant corporations sovereign immunity. It's just to provide an alternative to litigation for people who want it.