Companies have long been arguing that arbitration agreements are in the best interests of everyone involved, even when it seems pretty clear they only benefit the large corporations implementing and enforcing those agreements. District and federal courts across the country have been upholding all sorts of arbitration agreements between companies and their customers, even though the Federal Arbitration Act (FAA) was only intended for arbitration to be used as a means to settle disputes between businesses, not between businesses and individuals.
Because arbitrators work for for-profit companies, the outcome often is not objective when the arbitrator is under the thumb of the company. There are arbitration companies that have a reputation for being fair and objective, but when an arbitration agreement gives the company the right to choose the arbitrator (as these agreements sometimes do), the company is free to choose an arbitrator they feel confident will rule in their favor. If a company brings a lot of business to an arbitration company, the arbitrator may be influenced by that fact without even realizing it. Arbitration in many instances offers no explanation for a ruling and no opportunity to appeal the decision. Companies sometimes choose legal regimes that are unfair to consumers. Continue reading ›