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Spangenberg Shibley & Liber LLP | Feb 12, 2016

Are You Signing Away Your Rights?

Categories: Civil Rights, Class Action

U.S. Senators Patrick J. Leahy and Al Franken introduced a bill last Thursday, February 4, 2016, that would prohibit companies from contracting to send disputes regarding employment, civil rights infringement and certain other disputes straight to arbitration.

Arbitration is a condensed, inexpensive version of a trial. There is generally only one individual, called an “arbitrator,” who decides the fate of the case; the rules that apply in a Court room usually do not apply in arbitration. For certain small matters, arbitration can make sense - it generally moves at a faster pace than civil litigation, is flexible in terms of scheduling and can be cheaper than trying a case to the court.

In significant cases, however, the accuser may be at disadvantage. Many times these arbitration clauses, hidden in small print, require the use of certain arbitration groups with whom the company does significant business. They also require the Plaintiff to bear some or all of the cost. Most importantly, any final decision usually bars the Plaintiff from reentering any court and having a trial before a jury of their peers.

Many of us sign away our rights to take a case to court. We cannot get a job, purchase a phone plan or even open a bank account without signing away our right to a fair trial. Companies using arbitration have gained so much momentum that challenges regarding excessive bill charges, discrimination and even unwarranted death have been bypassed entirely. One highlight of Mr. Leahy’s statement was his example of a company that fired a woman who missed work because she had a miscarriage. Because of arbitration clauses in contracts or employment agreements, cases, such as these, that have potentially violated the Family Medical Leave Act (FMLA) are being dismissed and sent directly to arbitration.

Thursday’s bill was expected to struggle and face strong opposition, especially from the business lobby. Regardless of the outcome, it is imperative to know your rights and understand the terms and agreement of a contract. Always be attentive to any contract changes and never be afraid to ask questions.