Eliminating Forced Arbitration

Arbitration was designed as a freely-chosen alternative to litigation among corporate equals.  It has been twisted today into a tool by powerful corporations to force consumers and employees to surrender their right to hold corporations accountable for wrongdoing before an impartial judge.  Forced arbitration clauses are routinely inserted into the fine print of contracts that people must sign to buy a product or service or get a job.  Whereas victims of corporate wrongdoing could once band together to access justice in court when defrauded by corporations, now each consumer and employee will likely be forced to fight it out alone before a private arbitrator chosen by the company that cheated or discriminated against them.  Arbitrators do not need to be lawyers or follow precedent, yet their word is nearly always final and unappealable.  Forced arbitration is fundamentally unfair to everyday Americans.   

CFPB Comments: In June 2012, Alliance for Justice answered the Consumer Financial Protection Bureau (CFPB)'s request for information with a series of recommendations for how the CFPB  might best conduct its study of pre-dispute arbitration agreements, as authorized and mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

AFJ Report on Forced Arbitration: AFJ’s new report, Arbitration Activism: How the Corporate Court Helps Business Evade Our Civil Justice System, details the ways in which the Supreme Court’s rulings in cases like AT&T Mobility v. Concepcion and Rent-a-Center West v. Jackson have allowed big business to abuse forced arbitration contracts, building up a privatized legal system that robs everyday Americans of the chance to be heard by an impartial judge and jury. The report also tracks the harmful impact that the AT&T case has already had on civil and employment rights and constitutional protections in the short time since it was decided.

Arbitration Fairness Act: AFJ is a member of the Fair Arbitration Now (FAN) coalition and supports passage of the Arbitration Fairness Act. Visit the FAN website to learn more about the Arbitration Fairness Act, which would prohibit the use of forced arbitration clauses in consumer and employment contracts, or in disputes involving civil rights. 

» Click here to read the letter AFJ joined in support of the Arbitration Fairness Act

AT&T Mobility v. Concepction:  The Corporate Court has issued a number of decisions that funnel more and more everyday Americans into forced arbitration and out of court. Most recently, the Supreme Court issued a devastating blow to consumers and employees in AT&T Mobility v. Concepcion by holding that corporations are free to insulate themselves from liability by pairing class action waiver bans with forced arbitration clauses.

» Click here to read AFJ’s analysis of the decision

» Click here to read AFJ’s special report on the AT&T decision, AT&T Mobility v. Concepcion: Will the Supreme Court Give AT&T a License to Steal? 

AT&T Aftermath Report:  In the landmark case of AT&T Mobility v. Concepción, the Roberts Court held that the Federal Arbitration Act’s favorable treatment of contractual arbitration clauses preempts state laws aimed at protecting consumers and employees from unconscionable class action waivers.  As a result, AT&T was able to avoid legal and financial consequences of defrauding thousands of customers out of $30 for supposedly “free” phones, simply by including a provision in their service contracts that mandated arbitration and forbade class actions.  This ruling left customers with no recourse to recover their money from the company, because no one could reasonably be expected to bring an individual claim to recoup $30.  And, as widely feared, the case has already had wide-ranging impact on the ability of consumers and employees to vindicate their rights in court and recoup ill-gotten gains from companies. Alliance for Justice has been tracking cases in the aftermath of AT&T v. Concepción, in which consumers, employees and other individuals have been forced into arbitration and denied the right to proceed collectively against powerful corporations.

» Click here to read AFJ's special report on the aftermath of the AT&T decision

Media Coverage: For media coverage about AT&T Mobility v. Concepcion, please click here.