For some time, clients have known that law firms such as mine consistently oppose efforts by big corporations, car dealers, credit card companies and the like to deprive consumers of their rights to have their disputes decided in a court of law with “binding arbitration agreements” often hidden in consumer finance and purchase contracts. You rarely see the binding arbitration agreement in anything you sign; in fact, sometimes big corporations trick consumers into “signing” binding arbitration agreements by putting them into fine-print bill-stuffers so they’re not read. These “agreements” provide that you have agreed to binding arbitration and a waiver of any class action remedies if you even use your credit card after having received the bill-stuffer for a single charge. Fair? Hardly.
Big corporations have for years argued that binding arbitration is really fair, and that’s why big corporations are really doing everyone a favor by depriving them of their right to choose to go to court. Mind you, my firm is not opposed to choice: if a consumer wants to go to binding arbitration with a single arbitrator or retired judge, and wants to go there voluntarily, we’re happy to go that route, but we always insist that the client should have the choice.
Binding arbitration agreements deprive consumers of the choice to go to court. That’s precisely what they’re designed to do, and that’s why big corporations, car dealers, etc. hide them in small print in the midst of the multi-page consumer contracts that they force people to sign.
Some of my clients, however, have posed the question to me: what is unfair about binding arbitration? The arbitrator is supposed to be fair, right? Well, the answer is no. Corporations usually use captive arbitration providers, such as JAMS, NAF (National Arbitration Forum) or AAA (American Arbitration Association), where the corporation, NOT the consumer, is the repeat customer. The judges know that their paychecks and their repeat business comes from the corporations, not from the consumers, so these forums are hardly impartial.
If you have any remaining doubts about whether these forums are impartial, consider one of their biggest proponents: Dick Cheney. Our venerable Vice President has done pretty much everything within his power, and quite a few things very much outside of his power, to make a mockery of our system of justice. His recent refusal to comply with legal and congressional subpoenas is but a “tip of the Cheney iceberg,” towards which our ship of state is sadly headed.
Cheney’s distaste for pesky little things like constitutional guarantees, the Bill of Rights and due process of law date back to his Halliburton days, if not before. In the 1990’s, when Cheney was CEO of Halliburton, he tricked all of the employees of Halliburton and its subsidiaries into “signing” binding arbitration agreements simply by showing up to work. In other words, the company sent out a fine-print notice indicating that by the simple act of showing up to work, you had consented to waive your right to trial by jury and consented to having any disputes against Halliburton decided by in a binding arbitration. Halliburton has a long history of terminating workers who have filed worker’s comp claims and has a reputation of firing or laying off “the old, the sick and the halt,” so it’s little wonder Halliburton decided that none of its employees deserved any right to a jury trial.
Fast forward to 2005, and Jamie Leigh Jones, an employee of Halliburton subsidiary KBR, goes to Iraq and encounters a slightly upsetting employment situation: she is drugged and gang-raped by her fellow employees, who then lock her in a shipping container and warn her that if she tries to go for medical treatment, she’d be fired. The US Embassy eventually had to free her from the shipping container. Jamie had evidently managed to contact her father, who, after having no luck pursuing her daughter’s protection or safety with KBR or Halliburton, called his US Representative, Ted Poe. Representative Poe similarly had no luck with calling the company, so Rep. Poe had to involve the US Embassy. Obviously, there are embassy witnesses to the allegations.
When Ms. Jones tried to sue in court…SURPRISE!!! Halliburton invoked its binding arbitration clause, and Ms. Jones cannot pursue her claims against her employer in a court of law.
All thanks to Dick Cheney.
So, if you ever ask me in the future why I oppose involuntary binding arbitration, or if I detect that you might be buying the corporate PR messages about how wonderful it is, I’ll simply respond: would you want your consumer dispute against a corporation decided by Dick Cheney?
Robert F. Brennan, Esq. is a principal with Brennan, Wiener & Associates, an AV-rated law firm in La Crescenta, CA. His firm specializes in consumer protection litigation, including lemon law, car dealer fraud and consumer class actions. He can be reached through his website: http://brennanlaw.co