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Wall of Shame: Which Companies Are Blocking Your Right to a Day in Court?

By Craig Sandler, Program Associate, Congress Watch

Recently, Public Citizen unveiled a Forced Arbitration Wall of Shame, which lists more than 100 major companies that use binding arbitration clauses as a means to force their customers and workers into a privatized system of justice instead of a public court. Forced arbitration clauses are take-it-or-leave-it provisions that force hardworking people into a rigged system of justice that is heavily tilted to help companies achieve their desired results. In arbitration, consumers and workers don’t have access to an impartial judge or jury, but instead are forced to resolve their dispute with an arbitrator who is not bound to follow the law or precedent.

The right to challenge powerful institutions through the impartial legal system is a hallmark of the American justice system. Unfortunately, corporations’ use of forced arbitration clauses to rip off their customers and workers is rampant, which is why Public Citizen decided to catalog a sampling of the many corporations that use forced arbitration clauses in their terms of service or employment contracts in order to shine a light on how companies are seeking to restrict access to justice for their customers and workers.

Access to the courts give consumers, workers, servicemembers, and small businesses the right to challenge powerful institutions through the legal system including holding corporations accountable for discrimination, sexual harassment, wage theft, financial rip-offs, and other wrongdoing.

The arbitration system is biased in favor of companies in a number of ways.  For one, various actors in the process have perverse incentives. For instance, many binding arbitration clauses allow companies to unilaterally pick the arbitrator or arbitration provider to assess a claim, and companies are more likely to enlist arbitrators who have a record of business-friendly rulings; this incentivizes arbitration judges who seek repeat business to rule in favor of businesses more often, making them attractive to companies. And because there is no requirement to keep a public archive of decisions reached through arbitration, consumers and employees suffer from the disadvantage of not being able to check for biases in prospective arbitrators, even in instances where they do have some role in selecting them.

Secondly, companies clearly benefit from arbitration agreements that prohibit workers or consumers from pursuing class actions (their bans are often in included in forced arbitration clauses). Class actions allow consumers and workers to band together to bring a claim, which can be cheaper and more efficient than bringing individual claims. Filing individual claims can be prohibitive in terms of monetary cost and time invested.

Thirdly, the public rarely learns about the facts of cases resolved through arbitration, which prevents the population at large from knowing about the harms a company has caused, and also prevents these cases from establishing legal precedents that individuals can cite in future cases.

Finally, mandatory arbitration clauses can impose up-front filing fees and hearing costs (such as the arbitrator’s fees) that at times must be borne by the consumer or worker For these and a wide array of other reasons, arbitration is a rigged system that benefits companies and puts substantial limits on the rights of consumers and workers to seek justice and hold companies accountable.

To get a glimpse into the harms of forced arbitration in action, look no further than a recent case involving the always-embattled Wells Fargo. In this case, Jeff Edwards, a New Jersey pastor, was wrongly arrested when Wells Fargo employees mistakenly accused him of forgery—an error that Wells Fargo later admitted it made. When it came time for Edwards to seek recompense for the harms of his wrongful arrest, however, he was told that he may have to resolve his claim of wrongful arrest through arbitration rather than a lawsuit—all because he unknowingly signed a forced arbitration agreement when he opened an account 22 years earlier.  This episode was clearly harmful to Edwards, who has said “[Wells Fargo] threatened my reputation and put me through a great deal of angst and anxiety about the threat and the uncertainty of where this all was headed.” But because of a predatory clause buried inside a company’s terms of service that he signed long ago, he may not be able to make a rightful claim against the corporation through the legal system.

After you view our Wall of Shamesign this petition to your member of Congress urging her or him to restore your access to justice by supporting the Forced Arbitration Injustice Repeal (FAIR) Act. The legislation would prohibit companies from including mandatory, forced arbitration clauses in their contracts. Public Citizen has been at the forefront of fighting forced arbitration clauses for 40 years in courts, Congress, and through public education, and our work is finally bearing fruit. This week, the U.S. House of Representatives Judiciary Committee voted the FAIR Act out of committee. The legislation is expected to pass the House soon.

You can help us add to the Wall of Shame by blowing the whistle on companies that are taking away your legal rights with the predatory practice of forced arbitration. Tweet a link of the forced arbitration clause at the offending company and make sure to tag us at @Public_Citizen.