Lost in the Fine Print – New Documentary Blows Lid off Gross Unfairness of Forced Arbitration
By Paul Bland
Executive Director
The Alliance for Justice has just released an extremely powerful documentary, “Lost in the Fine Print,” which you can view HERE. Narrated by former Labor Secretary and genuine American hero Robert Reich, it provides both a big picture overview of what’s unfair with forced arbitration, and three examples of the human impact of its unfairness. Unfortunately, as incredibly unfair as each of the three examples is, they are not at all uncommon stories. (Full disclosure: I’m one of the people who speaks in the film, which I consider a great honor.)
As the film explores, forced arbitration is slipped by the vast majority of Americans – whether as consumers, workers, or small-business people – in ways that almost none of them will notice or recognize. The system is designed by the stronger parties to disputes – generally huge corporations – to favor them in disputes. Forced arbitration’s rapid spread has been aided by a series of 5-4 U.S. Supreme Court decisions that would never have been anticipated by the framers of our Constitution.
The film describes an employment case in which a U.S. Army Reservist was illegally fired from her job because her employer didn’t like her taking two weeks away from work to fulfill her military obligation. But an arbitrator selected by a corporation selected by her employer rejected her case out of hand, ignoring the clear legal rules applicable to the case. This is a fairly familiar situation in America.
The film describes a consumer who went to a for-profit school which promised her a number of things, including that it would give her a degree that would enable her to get a better job. She took out hefty student loans, but upon graduating discovered that her degree actually harmed her ability to get a job, because of the school’s terrible reputation and program. When she brought a legal action against the school (along with a number of other students), she was forced into arbitration, where another corporate arbitrator not only ruled against her, but issued an enormous “loser-pays” award against her, for more than $700,000. Loser-pays provisions are extremely rare in consumer cases in court (they’re only available when a consumer brings a frivolous claim), but their common appearance in forced arbitration is one of the reasons that so few consumers go into arbitration. (The Consumer Financial Protection Bureau has found that despite the presence of forced arbitration clauses in hundreds of millions of lending contracts, for example, fewer than 1,000 consumers actually bring claims against lenders in arbitration each year.) The upshot was that this consumer was victimized far worse in the forced arbitration process than she had been by the for-profit school that ripped her off.
Finally, the film describes a small business that was on the wrong side of substantial antitrust violations by American Express, and went on to lose in the U.S. Supreme Court. My strong views about this case can be found here.
The upshot is that the Alliance for Justice has put it all together. Whether one looks at forced arbitration in a high-level, systematic way, or whether one looks at it from the ground zero standpoint of people who’ve been cheated in the process, it’s a terrible system that denies far too many Americans access to justice.
People need to (a) see the film; (b) get angry (that will be a natural response to seeing the film); and (c) DO SOMETHING (the Alliance for Justice offers a number of steps, including petitioning a number of corporations to abandon the practice, writing letters to legislators, and others).
It’s one thing for people who don’t know that they’ve been cheated to be passive in the face of forced arbitration. But after you watch this film, and you KNOW what’s involved, there’s no excuse for any of us to sit back and let this incredible injustice happen to us and our country.
