Imposing Arbitration on the “Big Guys”

Jean Sternlight recently published an article entitled In Defense of Mandatory Binding Arbitration (If Imposed on the Company), 8 Nev. L. J. 82 (2007).

 She describes the project as one that she conceived initially as a “lark,” but what emerges is a truly fascinating thought exercise.  Jean’s basic thesis is summarized in the excerpt below. 

 I have supported and continue vigorously to endorse measures that would preclude companies from using adhesive contracts to require their consumers and employees to resolve disputes through binding arbitration rather than in court. One such measure is the Arbitration Fairness Act of 2007, recently introduced in both the House of Representatives and Senate.  Here I discuss an alternative response: make arbitration mandatory for the company, but not the “little guy.” That is, assuming only for the sake of argument, that defenders of mandatory arbitration are correct that companies and “little guys” won’t agree to arbitration post-dispute, in the same cases, and further assuming only for the sake of argument that arbitration is socially more desirable than litigation in many cases, perhaps we should impose arbitration on companies in certain cases, rather than on consumers and employees? …  I believe it is more justifiable from a policy standpoint to impose arbitration only on companies, rather than on “little guys” alone or on both companies and “little guys.”

Jean stops short of advocating for governmentally-mandated arbitration (in this, or any, context).  Not because she misunderstands the opportunity for a rhetorical swing for the fences.  Instead, she spells out in refreshingly honest detail the thinking that led her to a more cautious stance.  Even without a provocative punchline, I appreciate the way in which she steadfastly calls our collective attention to the implications of current arbitration practices in consumer and employment disputes. 


Michael Moffitt


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