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Battles Expose Core Problems with Arbitration System

November 18, 2015 News Articles

By Jeremy K. Robinson, as published in the Daily Journal

Mandatory arbitration clauses are a hot topic these days. Following the U.S. Supreme Court’s 2011 decision in AT&T Mobility v. Concepcion, which effectively allowed companies to wipe out class actions  with one inconspicuous paragraph, companies have stampeded to cram mandatory arbitration clauses in every conceivable transaction. Let us not forget General Mills’ ill-fated attempt to foist arbitration on unsuspecting consumers as thanks for visiting its website. Only a torrent of bad publicity caused the Minneapolis-based food manufacturer to rethink that move and revoke the controversial policy.

This proliferation has not gone unnoticed by government regulators and Legislators. The Dodd-Frank Act bans forced arbitration clauses in residential mortgage transactions and the Consumer Financial Protection Bureau is evaluating proposals to limit forced arbitration clauses in other circumstances. Here in California, a bill prohibiting them in certain employment contracts recently made its way to the governor’s office before being vetoed.

But a lot of the debate over mandatory arbitration clauses deals in generalities, often because information about private arbitrations is very difficult to obtain. Arbitrations are usually confidential, and there are no reported public decisions such as those in the judicial system. However, the recent cases filed against San Francisco-based 23andMe provide a glimpse at the litigation tar pits arbitration clauses can create. To learn more read CaseyGerry attorney Jeremy K. Robinson’s full article, published in the Daily Journal.