New Executive Order and Mandatory Arbitration

Whether they know it or not, and many do not, Americans go about their daily lives and conduct important and personal business while tied to forced arbitration contracts. Corporations routinely oblige individuals to sign away their rights by inserting just a few sentences in the fine print of contracts for cell phones; credit card applications; payday and car loans; job applications and employee handbooks; gym memberships and coupon offers.

Forced, or privatized arbitration makes it extremely difficult for everyday Americans to prevail against a corporation and obtain justice for injury or loss.

A new executive order has been signed, blocking mandatory arbitration clauses in employment agreements. What does this mean for employees?

2 thoughts on “New Executive Order and Mandatory Arbitration

  1. Don

    Americans and, especially, American lawyers believe in freedom of contract. But when contracting parties waive the right to trial by jury, they are waiving a constitutional right. Shouldn’t such a waiver at least have to meet the classic requirement that it be “a voluntary relinquishment of a known right”? Certainly in the adhesive consumer contracts we all agree to every day, and as to which we have no bargaining power, the consumer’s waiver is not a voluntary relinquishment in any realistic sense. A simple solution would be to require that such contracts allow for the consumer to strike the arbitration clause. Does that interfere with freedom of contract? Perhaps, but only by preserving an important constitutional right. What do you think?


  2. Bennett Rutledge

    Commercially mandated arbitration is starting to weaken. I bought a new SUV from Ford last weekend. When I pointed out the conflict between the “This agreement shall be covered by the laws of Colorado…” clause and the arbitration provisions, then dug in my heels, the Finance Manager set the whole Arbitration page aside. For this to happen, of course, you need to read ALL of the stuff they ask you to sign! :^s



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