Companies made arbitration clauses seem fair by offering to pay initial filing fees. Creative lawyers exploited this by initiating thousands of individual arbitrations simultaneously, forcing companies to incur millions in unexpected costs and creating powerful leverage for consumers.
The Federal Arbitration Act was created for disputes between sophisticated merchants of equal bargaining power. Conservative Supreme Court justices, starting in the 1980s, controversially expanded its application to everyday consumer and employee contracts, which was never the law's original intent.
By representing organizations that own shares in a company, public interest law firms can make "books and records" demands. This standard corporate governance tool becomes a powerful mechanism for investigating potential quid pro quo deals between corporations and government officials.
Antonin Scalia is famous for his "textualist" judicial philosophy. However, in cases involving forced arbitration, he frequently ignored the text of laws to reach pro-corporate outcomes. This led to legal reasoning that even colleagues found incoherent, demonstrating an ideological preference.
Terms of service are written so expansively that accepting them for one product can waive your legal rights related to entirely different interactions with a company. For instance, Disney argued a Disney+ subscription forced a man into arbitration for a wrongful death suit at a theme park.
Companies are adopting AI for dynamic pricing and customer service, leading to inconsistent, personalized outcomes. This parallels the injustice of forced arbitration, where secret, non-precedential rulings create an arbitrary system. Both trends undermine the societal expectation that similar situations yield similar results.
When federal agencies like the DOJ are seen as indifferent to corporate corruption, State Attorneys General (AGs) are stepping up. They have the power to enforce federal laws like antitrust and use state-level tools to investigate, effectively becoming the primary check on corporate power.
California created a legal workaround to forced arbitration for employees. The Private Attorneys General Act (PAGA) deputizes an employee to sue their company on behalf of the state. Since the state never signed the arbitration agreement, the case can proceed in court, circumventing the binding clause.
A small group of roughly 20 elite lawyers now argues about half of all Supreme Court cases. These specialists overwhelmingly represent large corporations, creating an echo chamber where justices are constantly presented with a pro-corporate narrative, likely influencing the court's pro-business slant.