Pale, Male, and Stale—Report Highlights Lack of Diversity in Arbitration

By Lexi Pozonsky, Legal Intern

Public Citizen has been fighting for years to ban forced arbitration clauses because they take away the rights of workers, consumers, and small businesses to have their day in court if harmed by a corporate wrongdoer. Forced arbitration clauses are non-negotiable terms in everyday contracts requiring future claims to be brought in private forums where the law or legal precedent are not even required to be followed. And, making a bad situation worse, there is very little diversity—of any kind—among arbitrators.

The lack of diversity in the legal profession and, in particular, among judges, is a problem. Diversity of experience and background gives judges greater insight into the issues and problems facing those who enter their courtrooms. That’s why Public Citizen has urged President Biden to choose diverse nominees for the federal bench. The lack of diversity in those handing down decisions is even more problematic in the private arbitration system than it is within public courts.

A recent report released by the American Association for Justice found that within the United States a staggering 88 percent of all arbitrators are white. And 77 percent of arbitrators are male. Arbitrators are also overwhelmingly older than the general population. Seventy-five percent of arbitrators are aged 65 years or older and 44 percent of arbitrators are 75 years or older.

The untenable lack of diversity among arbitrators is exacerbated by the fact that people of color and women are more likely to be subject to forced arbitration than men or white, non-Hispanic workers. So, those who will be entering the system will look vastly different from those who are making the decisions about their claims, few of which are appealable. In contrast to these findings about arbitrators, individuals who identify as Black, Indigenous, or people of color (BIPOC) make up nearly 40 percent of the U.S. population and those who identify as women constitute nearly 51 percent.

Forced arbitration clauses have become ubiquitous in society. They are included in many consumer contracts. And workers are now more than ever subjected to these clauses. Nearly 60 million workers—more than half of non-union, private sector workers—are subjected to forced arbitration clauses. By 2024, about 80 percent of those workers will be forced into arbitration if they are harmed.

Public Citizen supports the Forced Arbitration Injustice Repeal (FAIR) Act, which would prohibit corporations from sticking these take-it-or-leave-it clauses into consumer contracts and contracts of employment. It would also ensure civil rights and discrimination lawsuits cannot be forced into arbitration.

Until we succeed in passing the FAIR Act and restore everyone’s right to their day in court, we’ll continue to shine light on just how rigged—and non-diverse—the arbitration system is.