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The Rising Legal Challenges of Forced Arbitration: A Growing Threat Across Multiple Sectors
The Rising Legal Challenges of Forced Arbitration: A Growing Threat Across Multiple Sectors
Contracts with mandatory arbitration clauses are giving rise to a host of legal problems, such as child injuries, wage theft, and harm to the eyes. Over 80% of the nonunion private sector workers are predicted to be subject to compulsory arbitration by 2024. The U.S. Supreme Court's "forced arbitration" wall is beginning to crumble, thanks to the 2022 passage of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. However, some victims of sexual assault are not protected due to legal gaps. Since forced arbitration lessens culpability for a variety of misbehaviours, it is obvious that more legislation or rules are urgently needed to put an end to it. In addition, forced arbitration provisions pose a serious risk in the following areas: internet privacy violations, medical injuries, defective product liability, bank and lender fraud, and job discrimination.
Coinbase was sued by Manish Aggarwal and Mostafa El Bermaw for inadequate security and unsatisfactory customer support. Unbeknownst to them, Coinbase included a mandatory arbitration language to its User Agreement in 2022. Hackers gained access to Manish's account in April 2022 and took more than $200,000 from his family's funds. Cryptocurrency and US money valued at $70,000 were taken from Mostafa's account. They were both sued for the business's inadequate customer service and security. The claims were dismissed from court in August 2023 after the judge approved Coinbase's request to compel arbitration. Pedro Brito bought an LG range with faulty knobs in November 2021, which sparked a class action lawsuit against LG. Joshua sued Disney as a class action in December 2022, claiming that the company had violated Pennsylvania's wiretapping laws. Caroline Harper was obligated by the terms of her contract even though she did not read it in its entirety, the court said in March 2023, siding with General Motors.
The instances that are covered in the text include medical negligence, nursing home injuries, miscalculated medical leave, and arbitration provisions in a variety of sectors. A class action lawsuit was brought by Adam Bixby, an employee with severe health issues, accusing his employers, Toyota Motor North America and Toyota Motor Sales, U.S.A., of purposefully miscalculating his FMLA leave entitlement. After undergoing eye surgery at Lasik Vision Institute, Carlos Lopez Rivera consented to a medical malpractice compulsory arbitration agreement. Following Edith Rotan's injury at the Park Manor assisted living facility, the business attempted to force arbitration. A farmer named Dennis Clark filed a lawsuit over poisonous water and harm to his land against eleven corporations associated with the Sugar Camp Energy Mining Complex. In a class action lawsuit, Beth Berkelhammer and Naomi Ruiz accused NFP Retirement, Inc. of charging exorbitant fees and making unwise investments. The court approved the arbitration, finding that it didn't matter if the participants had individually consented to arbitration because their claims were being made in relief of the retirement plan.
Lawsuits alleging sexual harassment, harassment, and discrimination have been filed against CVS, Buchalter, Securitas, and Southwest. A case brought by CVS store manager Michelle Cornelius, who claimed that the company had violated both state and federal employment regulations, was ultimately compelled to go to arbitration. Gary Wolensky, Karen Hurdle's boss, sexually harassed and mistreated her. Hurdle is a legal analyst. After being sexually raped by Steven Medina, Crystal Settle filed a lawsuit against Securitas and Medina. Southwest, a lifeguard, was subjected to disparaging remarks and taunts by Madalyne Barnes, her boss, as well as workers' compensation. Tesla, a business well-known for its autonomous driving technology, has been accused of violating privacy and not living up to expectations. Although Tesla promised the safety of its advanced driver assistance systems (ADAS) technology, doubts have been raised regarding it. Tesla attempted to get the court to order arbitration, but the motion for an injunction was denied, and the court mandated that each claim be brought up separately in arbitration.
Mitch Oberstein, Sophie Burke, and Gary Matty, ticket buyers, contested the high ticketing prices that resulted from the 2010 merger of Ticketmaster and Live Nation. They sued Ticketmaster and Live Nation for antitrust, but their claims were dismissed from court because the terms of their usage agreements included mandatory arbitration provisions. Ashley Velez was hired to censor TikTok material, which resulted in an arbitration ruling due to TikTok employment misuse. Due to the usage of Microsoft's Face Application Programming in Uber's "Real Time ID Check" software, drivers Michael Komorski and Emad Kashkeesh were required to sign a 2020 Platform Access Agreement that included a compulsory arbitration clause. They sued Microsoft, alleging that the company had violated the Illinois Biometric Information Privacy Act. The case was eventually sent to arbitration. Class action lawsuits were brought by Uber drivers alleging misclassification, underpayment of minimum wage, and nonreimbursement of business costs. Class action bans are commonly seen in arbitration provisions, which prohibit customers from banding together to settle issues.
- Over 80% of nonunion private sector workers may be subject to compulsory arbitration by 2024, limiting their legal recourse.
- Despite recent legislation, victims of sexual assault and other issues still face challenges due to gaps in protection from forced arbitration.
- Forced arbitration affects multiple sectors, including healthcare, finance, employment, and consumer rights, often leading to dismissed or limited legal claims.
