Forced Arbitration Clauses Strip People of Their Right to Pursue Justice
Posted on behalf of D'Amico & Pettinicchi, LLC on Nov 06, 2015 in Firm News
Millions of people across the country have signed away their right to sue companies in court in what are being termed “forced arbitration clauses.” These clauses are hidden in the fine print of cell phone contracts, employee agreements, student loans and more. Most people aren’t even aware of what they have signed.
A recent investigative report by the New York Times revealed that these clauses are being used to throw out thousands of class action lawsuits, even in cases where the company has broken the law. In several instances, it has allowed companies to avoid legal consequences for fraudulent charges, workplace discrimination, unpaid wages and even negligence that led to physical harm or death.
“Mandatory arbitration clauses essentially strip people of the right to sue,” said Mike D’Amico of D’Amico & Pettinicchi. “This right is an essential component of our justice system and ensures all parties are treated fairly.” This new development has many other attorneys, judges and lawmakers concerned.
Arbitration is an alternative way of settling disputes, without the judges or juries you would find in a courtroom. The decision is made by a third-party arbitrator who is often not truly impartial. For example, when the Oakland Raiders cheerleaders sued the team over working conditions, N.F.L. Commissioner Roger Goodell was chosen as the arbitrator.
Many consider arbitration a “privatization of the justice system.” The system is rigged in favor of companies, where many arbitrators view the companies as their clients.
Although arbitration lacks the formality of a courtroom, an arbitrator can make many demands which make the process highly complex, requiring professional legal counsel and expert testimony. This often makes it too expensive to pursue claims of a few hundred dollars or less, where a class action would often be the preferred route.
Class action lawsuits allow a large group people who have faced damages or been put at risk to pool their resources and pursue a claim against an at-fault party. In the past, for example, banks that have made billions in profits off illegal overdraft fees were successfully sued using the class action process. Not only were the customers compensated for their lost money, but this also made the banks change their practices.
In most cases, people don’t even know they have signed arbitration agreements. The clauses are hidden in fine print at the end of credit card and cell phone contracts. In the case of employment, many workers have to choose to sign the contracts or go without a source of income. Nursing home patients have no choice but to sign these agreements or go without treatment. “People should not be forced to sign away their basic rights just to participate in society. That is what these clauses essentially do,” said D’Amico.
The personal injury attorneys at D’Amico & Pettinicchi strongly oppose mandatory arbitration clauses. Forced arbitration clauses strip consumers, employees and patients of their basic rights to seek justice in a dispute. We support a petition calling for the ban of these clauses.
The firm also encourages people to read contracts and understand the impact an arbitration clause can have on your right to pursue compensation for damages.