Are You Giving Up Your Rights By Signing Arbitration Agreements?

If you have signed a contract in the last few years, chances are you have signed an arbitration agreement. Arbitration is an alternative method of resolving disputes between parties. In arbitration, the disputing parties present their sides to an arbitrator, who weighs the arguments and decides the dispute.

When used as intended, arbitration can help businesses and individuals resolve disputes quickly and efficiently. This can be very cost effective, as it cuts down on court costs and other legal fees.

Unfortunately, businesses have begun to use arbitration agreements to block consumers from exercising their right to sue in court. Mandatory arbitration agreements can now be find in virtually every contract consumers sign. They are found in software terms of use, employee onboarding paperwork and various other contracts.

Most of the time, these forced arbitration agreements are hidden within contracts, which are presented as “take it or leave it” offers. For instance, if you are purchasing an app on your phone, there is no option to opt out of an arbitration clause when you are checking the box to agree to the terms of use. This is the case for most of these agreements. If you want to use the product, take the job, go on the trip, etc.—you must agree to settle any disputes via arbitration.

Why Arbitration Hurts Consumer Rights

This is a problem for consumer rights for several reasons. For one, individuals forfeit their Seventh Amendment right to trial by jury. One might argue that they are voluntarily doing so by signing the contract. However, these mandatory arbitration clauses are often buried within a lengthy contract full of legal jargon. Not only that, but because companies do not present an alternative to signing a contract with a forced arbitration agreement, customers are forced to either sign it as is or walk away.

Arbitration is Expensive for Consumers

One of the arguments for arbitration is that it is less expensive than a lawsuit. However, this is rarely true for consumers or employees. In fact, arbitration can cost more than taking a case to court. Oftentimes there is a large fee just to initiate the arbitration process, and individuals who lose can end up having to pay the company’s legal fees.

Arbitration Binds the Consumer, Not the Company

For the most part, arbitration clauses are written to protect the company from lawsuits. However, they usually do not provide the same protection for the consumer. While the consumer cannot bring a lawsuit against the company, the company retains its rights to bring the consumer or employee to court.

No Judge, Jury or Appeals Process

Arbitrators are not required to take the law or legal precedent into account when deciding disputes. Additionally, there is no review process to ensure the arbitrator made a fair decision, and the individual cannot appeal the decision. Moreover, the entire process takes place behind closed doors, whereas a trial is a public legal proceeding.

As if that weren’t enough cause for concern, take into account that major companies are frequently return clients for arbitrators. In fact, many arbitration clauses name the arbitration company that must be used to settle the dispute. With no need to consult precedent and an obvious potential for bias, it is easy to see how arbitration can disadvantage the individual and favor large companies.

Arbitration is Bad for Employees

Recent cases, such as the Uber arbitration clause, highlight the harm of mandatory arbitration for consumers. However, forced arbitration is equally bad for employees. By signing over their right to sue the company, employees give up the right to sue for discrimination, harassment, wrongful termination, and a host of other workplace infractions. Mandatory arbitration silences these employees and binds them to privately settle their disputes with the company through an arbitrator that likely has reasons to side with that company. These forced agreements are a threat to workplace laws that protect employees from discrimination, unequal pay, abuse and other wrongdoings.

“These forced arbitration agreements are everywhere—in employment offers, loan contracts and even nursing home agreements. Arbitration is fine when it is voluntary, but when it is forced it is an attack on consumer and employee rights,” said Attorney Walter Clark, founder of Walter Clark Legal Group.

Our firm has been handling personal injury cases throughout the California Low Desert and High Desert communities for over 30 years. With a 95% success rate, the California personal injury attorneys at Walter Clark Legal Group will fight to hold those responsible for your loss accountable and win compensation to cover medical bills, lost wages, and pain and suffering. If you have been injured and want to discuss your legal options, contact us today for a free consultation with an experienced personal injury lawyer. We have offices in Indio, Rancho Mirage, Victorville, and Yucca Valley and represent clients through the entire California Low Desert and High Desert communities.

DISCLAIMER: The Walter Clark Legal Group blog is intended for general information purposes only and is not intended as legal or medical advice. References to laws are based on general legal practices and vary by location. Information reported comes from secondary news sources. We do handle these types of cases, but whether or not the individuals and/or loved ones involved in these accidents choose to be represented by a law firm is a personal choice we respect. Should you find any of the information incorrect, we welcome you to contact us with corrections.

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