I wonder how many customers of the satellite TV company DISH Network know what has happened to them recently. Each Dish customer has received a notice from the company informing them their contract would now contain a mandatory arbitration clause. In the event of a dispute with the company, customers will now be forced to negotiate with the company through a representative selected by the company. This gives this large corporation a decided advantage over customers if a dispute arises.

These mandatory arbitration agreements are becoming more common in consumer transactions. When a consumer goes to buy anything from a DVR to a refrigerator, to a car, they are forced to sign a waiver of their constitutional right to a jury trial and be forced to resolve any disputes through binding arbitration. Usually, the corporation reserves its right to sue in court if the consumer doesn’t pay. Arbitration agreements also usually bar class or collective actions, meaning consumers cannot band together to bring a lawsuit.

DISH offered its customers an opportunity to opt-out of binding arbitration, but only if they provided written notice to the company within 30 days of receipt of the notice of arbitration. The letter we saw was dated Aug. 30, so for a lot of folks it may already be too late.

In April, Rep. Hank Johnson (D-Ga.) and Sen. Al Franken (D-Minn.) introduced the Arbitration Fairness Act before Congress. This is an attempt to revive earlier attempts in 2013 to pass legislation that would eliminate mandatory arbitration clauses in employment, consumer, civil rights and anti-trust cases. Unfortunately, the bill is on “life-support” in the House Judiciary committee for Regulatory Reform, Commercial and Antitrust Law. Govtrack.us, which tracks the status of pending legislation, gives the bill only a 1 percent chance of getting out of committee and a 0 percent chance of passing.

As the old saying goes, “there is strength in numbers.” That’s why class actions are so important to consumers. Mandatory arbitration prevents consumers from joining a collective effort to seek justice for wrongdoing. It also hamstrings individual consumers in litigation, giving the upper hand to big companies and eliminating the constitutional right to their day in court. For many DISH customers, arbitration has now been forced on them and most of them probably don’t even know it.

Source: Govtrack.us News Release

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