According to the American Arbitration Association®, Arbitration is the out-of-court resolution of a dispute between parties to a contract, decided by an impartial third party (the arbitrator).Some of the benefits of resolving a dispute through arbitration rather than in a typical court are that it’s faster and more cost effective than litigation.
Types of Arbitration
During voluntary arbitration the parties involved agree, at their own will, to take their disagreement to arbitration as soon as it arises.
It is very important for consumers to pay attention to any arbitration clauses that service or purchase contracts may contain, including employment contracts. Through the forced arbitration modality, a company forces a consumer or employee to take any disputes directly for arbitration. By signing a contract with such clauses, the consumer or employee automatically waives their right to sue, participate in any class action lawsuit or appeal process that may arise. The company or employer makes the arbitration mandatory and its results are binding.
Many consumer and civil rights groups oppose forced arbitration for the following reasons
The Employee or consumer waives their right to sue for discrimination for age, religion, sexual orientation, disability, equal working conditions (such as equal pay/equal work). Employee or consumer also loses the right to sue for harassment, abuse, wrongful termination of employment, etc.
Victims loose very important rights during a forced arbitration contract.Those include, but are not limited to retaliation for taking family and/or medical leave, whistle blowing and more.
Very few consumers are fully aware they signed a contract with a forced arbitration clause. Many companies draft contracts that make it difficult for employees or consumers to realize all the rights they are waiving.These contracts favor the company in detriment of the consumer/employee
Consumers cannot sue the company or employer for defective products, scams or negligence
Forced arbitration is a private process. It binds the consumer/employee to use a specific company for the arbitration process to take place.There are no judges or jury present and the resolutions cannot be appealed.
Some of the Most Common Cases that go to Arbitration for are related to:
Banks – Wells Fargo / Bank of America
Credit Card Companies
Purchasing or Leasing of Vehicles
Credit Reporting Disputes
Mortgage, Real Estate and Predatory Lending
Robocalls and Telemarketing
Abusive Debt Collection Practices