PKSD Newsletter: Forced Arbitration Clauses Threaten Your Rights

Posted on behalf of Jeff Pitman on June 10, 2020 in Personal Injury
Updated on February 24, 2022

young man signing contractAs if the economic difficulties brought on by COVID-19 are not enough, now there is yet another challenge arising from the pandemic. In PKSD’s latest newsletter, thousands of businesses are incorporating more legalese into their contracts that protects them from consumers who want to take legal action against them.

What is a Forced Arbitration Clause?

A forced arbitration clause prohibits consumers from filing lawsuits against corporations and other entities that may have caused them harm. These clauses mandate private arbitration instead, where consumers and corporations meet with an arbitrator who determines a resolution.

Companies often insert these clauses into contracts and terms of use agreements without telling consumers. Unfortunately, most consumers do not realize these clauses are in a contract until it is too late.

These clauses are becoming more and more common and may be used by many corporations, including cellphone companies, school organizations, nursing homes and more. A binding arbitration clause may also be hidden in your homeowner’s or rental contract.

When these clauses are used, consumers like you may struggle to hold companies liable for negligent actions or inactions, such as the failure to provide acceptable care in a nursing home, failure to conduct proper background checks for a caregiver or a negligent hiring process that permits someone with a history of violence to work in the same office as you.

How Is This Clause Being Used Amid COVID-19?

Companies are also using this legal loophole to shirk the responsibility to provide adequate protection for workers during the pandemic. A case in point involves Lyft and Uber drivers who attempted to argue that their classification should be changed from independent contractor to employee so they could be eligible for sick leave due to COVID-19. The case was dismissed because of a forced arbitration clause hidden in the employee contract. This step led many drivers, who realized they would not stand a chance of winning in arbitration, to continue working.

When you combine these binding arbitration clauses with other legal proposals for “blanket immunity,” some companies or individuals may never be held accountable for acts of negligence, or worse.

Additionally, since many of these clauses call for private arbitration, companies are able to conceal acts of misconduct from the public. What this means for you, for example, is that a nursing home may have had several instances involving acts of negligence, but they do not have to reveal it to you, the consumer.

How Can You Protect Yourselves and Others?

There are a couple of things you can do to protect yourselves and loved ones from the bad outcomes that forced arbitration clauses and blanket legal immunity promises:

  • Read the fine print of every contract you sign. Look for words that include “forced, binding or mandatory arbitration” or “dispute resolution mechanism.”
  • Be aware of these clauses when you purchase products online
  • Support legislation that seeks to end the practice of forcing consumers into arbitration, such as the Forced Arbitration Injustice Repeal (FAIR) Act by informing your senator.

Contact One of Our Lawyers For Legal Assistance Today

At PKSD, we advocate for injured victims in Wisconsin every day, and we are prepared to help you too.

Contact our Milwaukee personal injury lawyers today and arrange for a free legal consultation to discuss your situation. We can answer your questions and validate your claim in a no-risk, no-obligation completely free claim review. If we represent you, there is nothing to pay unless you get paid first.

Call PKSD Law for legal help today: 877-877-2228

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