A Raw Deal for Workers and Consumers

posted on:
November 1, 2002


In August 2001, the managing director of the National Arbitration Forum gave a detailed interview for Metropolitan Corporate Counsel magazine. He explained how corporations could use mandatory binding arbitration, including basic clauses that eliminated punitive damages and class action lawsuits, to accomplish the objectives of “tort reform.”

He declared, “Now is the time for corporate counsel to reexamine the use of the arbitration took to accomplish their own Civil Justice Reform goals.”

Without question, mandatory arbitration is achieving what the tobacco, insurance, pharmaceutical, chemical, oil and auto industries have been trying to accomplish in Congress and state legislatures for the last 20 years – elimination of the American public’s right to sue and hold accountable corporations that cause harm.

According to Paul Bland, staff attorney with Trial Lawyers for Public Justice, “Many corporations claim that with mandatory binding arbitration, you’ve forfeited you constitutional right to sue them. Mandatory arbitration clauses slam shut the courthouse doors for millions of consumers and workers just like you.”

A 1925 federal law called the Federal Arbitration Act is providing the legal basis for the brad use of arbitration clauses in consumer contracts. In the 2001 case Circuit City v. Adams, the U.S. Supreme Court relied on the law to say that companies can force arbitration clauses on workers. This term, the high court will decide of the Equal Employment Opportunity Commission, which filed a discrimination case against Waffle House on

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