The financial software firm Intuit announced that shareholders voted down a proposal that would have forced shareholders into binding arbitration instead of allowing them their day in court if they sue the company, its officers or directors. Earlier this month, a coalition of organizations urged shareholders to vote against the proposal. In the only, only 2.4% of shareholders supported the proposal.
Consumers, workers and small businesses understand that forced arbitration clauses block everyday people from holding corporations accountable for wrongdoing. This vote proves that large institutional investors – including Intuit’s largest shareholders, Vanguard and State Street – are no fans of forced arbitration either. Intuit’s shareholders sent a strong and resounding message against forced arbitration with this vote. It should be seen as a cautionary tale for other companies thinking about trying to force everyday investors into secretive, arbitration proceedings.
Over the past decade, forced arbitration clauses have become almost impossible to avoid in consumer and employment contracts.