I decided to write this blog as a service to all those who have already been negatively affected by an arbitration experience or soon could be. Despite the veneer of “fairness and impartiality” that is propagated by arbitration advocates, the current system offers little protection for consumers, small businesses and employees with far less bargaining power than those with whom they’re contracting.
I recently went through an excruciating arbitration horror story of my own. I was forced to sue a recent former employer for breach of contract and fraud with the arbitration company, JAMS, My opponent perjured himself throughout deposition and right in front of the arbitrator. Then he even admitted to defaming me during a vigorous cross-examination. It all looked very promising – so promising in fact, that he made two huge settlement offers, which I now regret having declined. Just before the conclusion of the proceeding I was informed by someone in the industry that my former employer was spreading lies about me, presumably in an effort at blacklisting. We brought it to the arbitrator’s attention, but he decided to ignore it.
Despite what was a huge preponderance of evidence in my favor, the arbitrator, unbelievably, decided against me. He also ruled that I should pay my former employer’s legal fees, in addition to my own. The total bill was almost a million dollars and was completely devastating.
It wasn’t until after the proceeding when I attempted to appeal the arbitrator’s decision that I learned of the built-in iniquities of the binding arbitration system here in the United States. The system usurps ordinary consumers’ basic civil right to trial by a jury of their peers and grossly favors big business. Don’t believe me? Read some of the stories posted in this blog. Worst of all, there is almost no possibility at all for appealing a lazy or downright wrong ruling by an arbitrator.
Originally, our government enacted the Federal Arbitration Act in 1925 in order to alleviate pressure on an overworked legal system. The intent was to allow large corporations to settle their disputes privately, outside of the public courts. However, the Act still exists almost wholly unaltered since that time, and today is being used as a means of settling disputes between big corporations and ordinary citizens – a disparity that was never intended.
Think it doesn’t affect you? Think again – almost everyone in this country who has a cell phone or a credit card is subject to a binding arbitration agreement. Even hospitals and doctors have them buried in the fine print of their admissions documents! This allows these parties to eschew the civil litigation system that you already pay for and to which you are fully entitled. Instead of a jury of your peers, your case will be decided by a person who works for a big corporation which is being paid by the corporation you are litigating against. To make matters worse, most arbitrators work in their off-time as defense attorneys for the same sort of companies you are suing. Imagine suing a hospital for accidentally using elevator lubricant to clean surgical instruments used during your operation – and the “impartial” person assigned to decide your case is an attorney who makes a living defending doctors’ and hospitals’ malpractice claims. It happened to a man named Bennie Holland.
Perhaps the worst part of arbitration is that there is NO PUBLIC RECORD OF PROCEEDINGS. This is shockingly irresponsible as it allows corporations and the people that run them to violate your rights with impunity and without any fear that discoverable records of their transgressions exist. In my case, this meant I had no way of knowing that my prospective employer was a people-mill that had been in almost constant legal battles with former employees when I signed my contract – a contract which included a binding arbitration agreement.
I ask that you please use this blog as a venue to broadcast your own personal arbitration horror story. I’m making a documentary about the injustice of the Alternative Dispute Resolution (ADR) system and the current initiatives to reform it and I need to hear YOUR story. It’s incumbent upon us all to use our voices to close this loophole that is allowing ordinary Americans’ right to a fair trial be usurped by large corporations and their lobbyists.
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Please also contact your Senators and Congressmen and tell them to support the Arbitration Fairness Act of 2009 which is currently working its way through Congress.