Skip to content

Debunking the Myths about Forced Arbitration

Debunking the Myths about Forced Arbitration

Myth: Arbitration is more accessible and cheaper for consumers.

Fact: Arbitration can cost thousands of dollars that most of us can’t afford. Companies can force individuals to travel thousands of miles on their own dime to arbitrate. And if you lose – which happens the majority of the time – there is a good chance you’ll pay the company’s legal fees too.

Most of all, arbitration is costly for Americans because companies use tricks, like putting forced arbitration in investment and retirement accounts, to protect themselves if your pension disappears. Lack of oversight is how we ended up in an economic crisis. We need to put a stop to companies avoiding accountability, or our economy will only get worse.

Myth: Arbitrators are just like judges; they have to follow the law and publicly state the reasons they made their decision.

Fact: Americans are being forced to hand over our rights to corporate America. Arbitrators do not have to follow the law and they don’t have make their decisions public or provide any explanation for their decisions. Laws that protect us against discrimination based on age, sex, religion, race, disability, and unequal pay for equal work, such as the Civil Rights Act and the Equal Pay Act, are meaningless if unenforceable in court.

Myth: Opponents of forced arbitration want to prohibit all arbitration.

Fact: Employers and businesses like to say we have a choice to use arbitration or go to court — but we don’t. If you show up for work or use a product or service, you lose even the option of going to court. The Fair Arbitration Now campaign encourages voluntary arbitration; and only opposes the practice of forcing arbitration on consumers before they have a dispute. If arbitration is good for employees and consumers, then we should be allowed to choose to participate after the dispute arises, when we can make an informed decision.

Myth: Most consumers favor forced arbitration.

Fact: Consumers favor voluntary arbitration and being given the choice to arbitrate.
Most consumers also expect that if we or our loved ones are harmed in some way by a company, we will be able to take that dispute to court. We don’t expect to be forced into a separate corporate legal system where the deck is stacked against us because there’s no judge, no jury, and no public record.

Myth: Arbitrators are neutral, unbiased decision-makers.

Fact: Forced arbitration favors corporations because corporations are repeat customers of arbitration companies. Companies don’t usually bring repeat business to arbitrators that rule for consumers. Any arbitration company that wants the guaranteed business that comes from being written into consumer or employment contracts must rule against consumers and employee most of the time.

Leave a Reply