Forced Arbitration Hurts Women and Minorities
A new report examined the lack of diversity among arbitrators. CNBC published an exclusive article about the report and the lack of diversity faced by people forced into arbitration. Among the findings in the report: Women and minorities are more likely than white men to be forced into arbitration, while arbitrators are mostly male and overwhelmingly white.
Our Constitution’s Bill of Rights, in the 7th amendment, says that in civil cases, “the right of trial by jury shall be preserved.” The Founders recognized that justice should be public, and that there is no fairer decision-maker in a democracy than a jury of one’s peers. But in arbitration, proceedings are private, and the decision-maker is not chosen on the basis of fairness. As noted in the report, “It’s like having two teams, and one team gets to choose the umpire. And if they don’t like that umpire, they can choose a different umpire. There are no limits to what they can do in that regard.”
Americans are increasingly subject to mandatory arbitration provisions, whether they realize it or not. Something as simple as signing a credit card receipt or buying an item online can make a person subject to mandatory arbitration provisions. Roughly 60 million workers are subject to forced arbitration provisions at their place of employment. An academic paper cited in the report notes that eighty-one companies in the Fortune 100 use arbitration agreements in connection with consumer transactions, and that more than sixty percent of United States retail e-commerce sales are covered by broad consumer arbitration agreements.
Corporate defendants disfavor female and minority arbitrators. Female arbitrators rule more often in favor of consumers and employees than male arbitrators. In addition, the study found a significant difference in the amount of compensation assessed by certain male and female arbitrators.
The pro-consumer American Association for Justice (AAJ) made strides in the last Congress supporting the passage of the Forced Arbitration Injustice Repeal (FAIR) Act in the U.S. House of Representatives to eliminate forced arbitration and restore the rights of workers, consumers, and patients. Bills have now been reintroduced in both the House and Senate. Please contact your members of Congress today to urge that they support the bill.
The AAJ is also supporting laws prohibiting the use of forced arbitration in military service member claims, sexual assault and harassment claims, and nursing home cases.