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Oh man, I was eaten by a Grue. Just like real arbitration.
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@B: Sir, my ass has fallen off due to my laughing so hard. Please appear for mandatory binding arbitration on the matter of my ass in the Northern Mariana Islands by Tuesday. :)
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All excellent points, but considering you're choice when signing a contract with an arbitration clause (lets say, a major utility company that is the only company providing a service in that area), you are forced into this system. Which inevitably means the only response is legal action... Oh wait, there's another choose your own adventure of endless pointlessness.
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@Darrone: Actually, in the case of major companies, just find this clause, cross it out and put your initials by the mark. If they don't notice you did it, or the rep you're dealing with doesn't know enough to care, you won.
Not a foolproof plan, but at least it's *something*.
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Great, our public transit union and the city just went to binding arbitration after a 53 day transit strike.
The taxpayer/consumer gets screwed again.
@ottawa_guy: I think the difference there is that the \"customer\" (transit union) is trying to negotiate a NEW contract with the only \"business\" (the city).
Also it's in the best interests of both parties to get the buses rolling again since there's a massive third party (the people) who want the service running again.
It's a 1:1 thing here. You too would wield supreme power if you were the ONLY customer a business could do business with. Especially if a vested 3rd party was demanding you get back together and not break up immediatly again.
But since in company vs consumer battle, you are one of the faceless millions that they do business with, so your power goes strait into the shitter. And it's unlikely that there's any large third party organisation that's breathing down your collective necks to renew whatever contract you're disputing on.
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@ottawa_guy: Actually union-management disputes are the ideal type of arbitration. Both parties can afford lawyers, both are approximately equal in power, and I think they both have the ability to choose the judge (so it's not just some shyster working for the company full time). It's a lot better than suing or striking.
Corporation-consumer arbitration, where there's a huge power differential, is a scam.
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@ottawa_guy: when it comes to union Vs. management when mediation doesn't work, arbitration is usually the next step. Litigation could take years and with a lot of unions the arbitration proceedings will be equal. One of the main goals on both sides is to get everyone back to work. No one makes money when no one's working.
So if you are handed a paper contract (say from a daycare center) and see this clause, are you allowed to just cross it out and sign it to show that you aren't in agreement with that section?
@Tiki McTikatron: My husband and I have an ongoing argument about this (we're both lawyers) ... his stance is if they accept the contract where he's crossed things out and initialed them and still provide him with the service, they've accepted the changes. My stance is that the low-level employee clearly doesn't have the authority to make any changes, so you're better off signing the boilerplate and then alleging the boilerplate is unconscionable and had a flaw in formation because you weren't allowed to dicker terms.
We're super-fun when we renew our cell phone contract!
(Actually, the one that makes me crazy is he actually does a lot of the contract-writing work for a local hospital/health care group ... and whenever he has to SIGN one of their contracts as a patient, he crosses things out like crazy and refuses to sign clauses THAT HE WROTE.)
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@Eyebrows McGee: My mother has a legal and real estate background. When I was in college and after, every lease I ever signed my mother would take one of those old style BLACK markers and mark through sections completely so there was no way they could even be read at all. She'd tell the landlords they could initial those parts and we'd all sign that one or they could do a new one.
Landlords loved me when I walked back in with the lease. They always willing dealt with her issues but fhew, we had NO slack from those folks after we moved in.
IANAL so take this for whatever you value it BUT... if said low-level employee is authorized to enter into a contract with you on behalf of the company he works for, doesn't that also give him the authority to enter into a modified boilerplate contract if someone was clever enough to start crossing out clauses?
Yes, I'm siding with your husband on this. If companies don't like it, then they need to stop having flunkies enter into contracts for them and have someone other than a minimum-wage earner just blindly signing paperwork.
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@Eyebrows McGee: that last part about your husband refusing to sign the entirety of a contract he himself drafted is really funny.
but as to your argument - why not go w/ both? i mean, there's no reason you can't have alternative claims, right? first, the scratched out clauses are not part of the contract, and in the alternative, the clauses are unconscionable?
Better to take multiple swings, right?
(i wonder if you can argue against such contracts of adhesion now. I mean, cell phones have basically become a necessity, and since probably all service providers have the same BS clauses, there's no meaningful choice, right? they're unconscionable. so there's gotta be a way to contest those clauses.)
@Aristeia: \"there's no reason you can't have alternative claims, right?\"
Maybe. :) in some jurisdictions, if you show evidence you READ the boilerplate/contract of adhesion -- like that you've marked things out -- then they actually HOLD you to it, whereas if you don't read it, some courts will say you can't be held responsible for the contents of a boilerplate contract since you didn't read it and couldn't have argued with the contents anyway.
But mostly we just like to argue. :)
@Eyebrows McGee: that is pretty interesting. yeesh. contract law - not my love, lol.
and, haha, yeah i love to argue, too. future lawyer here :P
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@Aristeia: It would seem there would be more training in that area for those employees offering such contracts to be signed, if in fact such exclusions/cross-outs/amendments would hold up. I believe us consumerist readers to be pretty bright folk, but in my humble opinion, we can't be the first to think of this.
Not to mention the parts of the contract which are not on paper for you to sign. Such is the case with cell phone contracts. The paper you sign states that you also agree to a pile of words on the web somewhere. Some stores try to tell you they can't print that for you, or allow you to read it on the store's computers.
@TaterTom: \"Not to mention the parts of the contract which are not on paper for you to sign. Such is the case with cell phone contracts. The paper you sign states that you also agree to a pile of words on the web somewhere.\"
So cross that part out too! :-P
@Eyebrows McGee: I am not a lawyer, but I have a pretty good handle on contract law from a consulting business I run on the side (engineering graduate student).
My understanding has always been that if a person is representing a company, their actions are those of the company. I don't think being a peon is a valid contractual out. They are acting as a agent of the business and the business is legally liable for all their actions. If they do not have the authority to modify contracts then they would clearly also not have the authority to enter into them.
@Todd Fernandez: Not all agents of a given business have the authority to perform all actions for that business. And one need not have the authority to draft a contract to have the ability to offer that contract for signing.
It's also an area of practice (one-sided boilerplate contracts offered to hundreds of thousands of consumers with no one EVER representing the consumers on that side of contract) that has vastly outstripped the traditional contract law. We're still poking boilerplates into the traditional contract framework, but I'm honestly not sure that's appropriate, since they're really very little like a \"contract\" at all.
@Eyebrows McGee: RE: Todd Fernandez:
If that is the case, what would say prevent me from starting my own company, placing myself as the said peon without authority, and signing the contract on behalf of the \"business\". Then when said business no longer accepts the terms of the contract, refuting the contract stating that said peon signed it without having the authority to do so.
I would like to tend to agree with your husband regarding his stance, changes made to the contract are binding at signing. I am sure however, that the cell phone peon is instructed to not allow changes to the contractual terms.
@Ingram81: Because courts don't deal with fake situations and are typically unimpressed by your attempts to create them. :) If you are the owner of the company, you will not get away with peonage claims. If it was your \"common practice\" to let peons make and accept contract changes, you'll probably be held to it. But I can guarantee you that the verizon employee or ER nurse who's taking your standard documents has no authority to make or change contracts on behalf of the company, so they probably don't have the authority to accept/authorize your changes.
There are more sophisticated version of this gambit, but typically the law is pretty clear on who has what kind of authority in a corporation, and since you have to file various articles of incorporation with the state and you have all kinds of tax returns, disclosures, etc., it's usually pretty clear who is and isn't allowed to, say, sign a check.
@Tiki McTikatron: You can -- as others have pointed out, have both sides initial it (in, say green ink), and get a copy of the whole thing with their initials and signature. Also check the section on amending the agreement (usually toward the end) and scratch out any part that says you can't scratch out parts of the contract.
AAA arbitration really isn't that bad. The really crappy arbitration terms are in car purchase agreements, where you have to submit to arbitration run by the car industry. Luckily, now is a great time to scratch those out, since car dealers are very hard up for new buyers.
@cf27: Actually, most arbitration clauses by auto makers are NON-binding on the consumer and binding on the auto makers. SO, even if the consumer isn't happy with the decision, they are free to take legal action. Most consumers (86%) who go through the auto arbitration program run by BBB would recommend it to others.
You can cross something out, but depending on the wording of the contract you may still agree to everything on the page (even that which is crossed out) or they could just refuse service.
Do you think your cell phone company would just let you cross out the two year agreement portion?
@Robert M Getch: Most businesses probably don't even look at the contracts beyond the signature spots. They may not notice. But when do you sign a physical contract for cell phones?
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I would think so. But that also means they are able to decide not to accept your contract (and your child) and you are back to square one.
Well that was fun! I haven't done a \"chose my own adventure\" since I was a kid! Off to the bookstore...
@tedyc03: Just save some money and go to Wikipedia. It's almost the same thing. You never know where you'll end up.
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@Eyebrows McGee: I love the \"go back\" feature. It's like keeping my thumb on the original page and calling mulligan if I don't like the result.
@Tiki McTikatron: Both sides have to agree to the change in the contract, so you'd have to cross it out and initial it, and get the day care company to initial as well. You're best off telling them to reprint the contract without the clause or you'll go someplace else. This works best when the company selling is as/more desperate to sell than you are to buy.
we are fighting back - www.arbitrationjustice.com Join the forum and learn how to beat the beast...
I've been hearing a lot lately about judges ruling mandatory arbitration clauses as unconscionable.
In cases of Union vs Management, depending on the union, arbitration could be helpful in getting the problem resolved quickly and in a lot of cases it is a lot more equal than Massive corporation vs little you. Sometimes the arbitration can be closer to the union than management.
@snowburnt: Railroad unions are big on the arbitration gimmick. Just for not showing up for work when I quit, they told me I was required to show up for arbitration [read:punishment]. I just laughed and hung up. The facility manager kept calling me back, but would not let me talk, so I'd hang up again. He even called three times in a row, and again later, when I stopped answering.
@TaterTom: I was referring more towards union vs. management disputes rather than employee vs union or employee vs management.
In some cases the union really holds all the power. I've heard some stories about the IRS workers union. Your coworker could kill someone and hang their head on a stake outside their cube and the union would make a case that he shouldn't be required to move and would get counseling rather than be fired.
Ok I nearly wet myself laughing. Too bad it was about a serious problem.
ok, that was a faaaaantastic post. I gotta say. I loved it. The choose your own adventure style was hilarious. Please feel free to rip this style off again, it was too good.
But for the last part, wouldn't it be more accurate to say instead of \"The essential component is the choice to arbitrate, or not arbitrate.\"
... to say \"The essential component is whether you are bound by the decision rendered in arbitration.\" That seems to be what you're saying in the rest of the article. Arbitration might suck, but as long as it's not binding, you're not completely hosed - you can still go to court, so long as you put forth a good faith effort to come to an agreement.
right? i dunno, i haven't taken any classes that really focus on arbitration. all i know are vague things i learned in civil procedure and contracts.
@SynMonger: It's like a test trial. But I agree that it would be a waste of time and money if it's not binding. No one would agree to it. The only way a consumer can get justice vs a corporation is through the court of public opinion. Someone strong arming you? Someone over charging you? Someone cutting corners? the usually channels of customer service don't work? Call the paper, call the local network news.
An article later and the problem will be resolved. If not I'm sure there's a reporter out there dying to do a follow up.
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bind: to tie down
mandatory: made to do by authority, not choice
arbitrary: decided by whim, not logic
mandatory binding arbitration: you're fucked!
When I worked at HR Block, we were told that a client could sign the contract and then opt out of arbitration by sending a letter within thirty days. It is (was) in their service agreement. If faced with this clause, I will look for the \"opt out\" method.
I voted Pat Buchanan. The ballot was confusing! :(
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OK, that was some kind of awesome. Kudos, Alex!
Although, I was expecting less lawyers and more grue.
Just like you can find an crooked arbitrator, you can find a competent judge that will overrule the arbitration because its unconscionable.
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There is a sample letter at credit boards to refuse arbitration is gives a ruling. I used it twice in my credit repair and my neighbor used it also.
All 3 times it worked and never heard another word about it. I guess the cases were two small for real legal action to be worthwhile.
I sold every last one of my CYO Adventure books to pay off some bills...I REALLY regret doing so.
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My God this is awesome.
I had some very tame d&d choose your own adventure book. My momm looked at it and was to stupid to very it out. She said is was satanic. I thoughts adults were morons.
Isn't the whole point of a justice system so that people don't form lynch mobs?
This seems counter-productive in that light. Perhaps it's time to return to the basics.
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Maybe consumers can turn the tables. Don't sign the seller's contact until he signs yours - binding arbitration if the buyer screws up with the buyer specifying the location and choice or arbitrator. Then do a chargeback or stop payment.
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@Eyebrows McGee: I'm sure he's a wonderful man and you love him to pieces, but he needs a serious kick in the jimmy. Dude. If you don't want to sign it yourself maybe you shouldn't ask others to?
Unless the company makes it clear to you that the low-level employee is not authorized to accept those changes, I think there's a good argument that they're stuck. You handed them the altered contract and you're entitled to rely on their acceptance of it. \"Oh well that clerk wasn't supposed to do that\" ten months later? Riiight.
@mythago: \"If you don't want to sign it yourself maybe you shouldn't ask others to?\"
I always tell him that, but from a lawyerly perspective, he's exactly right -- his job when he works for the hospital is to protect the hospital by providing the best possible terms for his client. It's a flaw in the system that there's nobody representing patient interests ever in the process, but it's not a flaw he can fix.
When he's a patient, his job is to protect himself, on the best possible terms for himself vs. the hospital.
Really, it becomes more and more clear to me that the issue with these boilerplates is that there's not a lot of state regulation telling them what can and can't go in them, and there's never anyone during the process to support the consumer's POV in drafting the contract. You're handing out contracts where one side has all the lawyers, makes all the rules, and the other side can like it or lump it -- and all contracts for that service are going to be equally unfair to consumers. That's not really a \"contract\" and we should probably stop pretending it fits into contract law. Companies should be able to have \"terms of service,\" but we shouldn't call them contracts and there should be certain consumer protections built in. We probably need a new regulatory scheme for it, whether that's a new body of law analogous to contract law or a new set of government-imposed regulations by industry.
@Eyebrows McGee: \"That's not really a \"contract\" and we should probably stop pretending it fits into contract law.\" I completely agree. I think the better term is called getting raped over the barrel.
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Screw you guys. In this economy I have to ask myself how do I get to become a arbitrator? I think I can get a lot of repeat business (wink wink nod at companies).
/end sarcasm
Funny thing for most companies- they send out a standard contract and don't really read anything past the signature page. At my place of business we've crossed off every single binding arbitration clause (and also the ones that would force us to pay legal fees reguardless of who wins... arg on those) signed it, and sent it in with no hubbub from any companies. Now granted we don't deal with huge companies like Coca Cola or Sprint or whoever but still... could be a good tactic.
Many trial lawyers associations are lobbying in their various jurisdictions for the abolishment of Mandatory Arbitration clauses, or at least trying to make them more conspicuous and negotiable in contract language.
The Penguin: \"Get 'em, boys! Waaaaahwahwahwah\"
People need to start getting pissed off about mandatory binding arbitration - if not because of what's happened to them, then because of what's happening to their fellow Americans who are getting screwed by big business EVERY single day.
I lost my career and a fortune because I sued my former employer for breach of contract and fraud. Even with a mountain of evidence in my favor, the JAMS arbitrator decided for my former employer - even with blatantly obvious perjury flying out of his mouth like pea soup. And there was NOTHING I could do about it as there is virtually no chance of appeal. I was ordered to pay the respondent's legal fees, in addition to my own - which is why I'm in the process of declaring bankruptcy.
I agreed to the arbitration clause in my employment contract because I had no idea of the process's pitfalls. Meanwhile, there were a string of former employees who went through the same experience with this guy, but there was no way for me to know about it because of the inherent secrecy of the arbitration system.
Reform will have to come through legislation - as courts (esp the US Supreme Court) seem to be enamored with the arb process. Get pissed off and call your Senators and Congressmen and tell them you want arbitration reformed. There is no excuse for privatization of the justice system - it's a ridiculous idea.
Best,
Ehren Bragg
www.arbitrationhorrorstories.com
Mandatory arbitration is bad, ok, I get that, but how do you avoid it? Say you spent two months looking for an apartment, need one right now, and their is a waiting list two inches thick of people willing to accept the arbitration agreement on your lease if you don't.
The game is often rigged far before you get to this point...
This all seems a bit off,if I write a contract which says \"By agreeing to this contract you confer onto me the rights to kill and eat your firstborn, and you agree to bring no case against me in criminal or civil court, and agree never to disclose the nature of this contract to any person\", It would not make killing and eating people legal. You can't just make a contract that nullifies the laws and rights of the American people. Unless... you mean to say, we have no rights ?
So who steps in and protects the consumer from this sort of entrapment?
what the... and to think how many arbitration agreements i may have already signed...
In my province (Québec, Canada) we have a consumer protection act protecting consumers against this kind of clause in a contract... maybe your state should include similar rules in their legislations...
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Screw this, time to take them to Judge Judy.
@codepage9: I know some people that went on JJ, and it is a similar deal. You agree that you have no other means after the show to appeal or otherwise seek compensation for anything related to the matter. The show pays for any amount awarded to either party, and sometimes even pays a party before going on the show, in order for them to act a certain way. A great recourse for someone in a legal dispute between family members, I suppose, where one can be right, one wrong, and nobody has to pay for it.
@codepage9: From what I hear, Judge Judy is basically a televised version of arbitration.