Yesterday, the Center for Justice & Democracy released its newly-updated “Cases Tossed Out of Court Because of Forced Arbitration Clauses and Class Action Bans.” We thought we’d highlight some of the newer cases. If you thought forced arbitration clauses and class action bans couldn’t possibly, legally be used in cases like these, think again. They could. And they were:
- A 90-year-old nursing home resident was thrown against a wall by a nurse’s assistant, dying from injuries. Her death was ruled a homicide and the assistant was criminally charged. Yet her family’s wrongful death suit was thrown out of court. A forced arbitration clause had been buried in the nursing home’s admission agreement, which was signed by her daughter.
- A 12-year-old boy was sexually assaulted and stalked at his boarding school. When his father sued the school, the case was forced into secret arbitration because he had signed a student enrollment agreement containing an arbitration clause.
- An employee suffered repeated sexual harassment and retaliation at a consumer goods refurbishing company. During this time, each employee was told to sign a new employment agreement containing a forced arbitration clause. This employee refused to do so, both orally and in writing. Nonetheless, a court forced her into arbitration.
- Video-game giant Valve allowed underage gambling through its online Steam Marketplace platform and video games like “Counter-Strike: Global Offensive.” A court agreed with the company that children had agreed to arbitrate any disputes when they created their accounts and that their parents, though non-signatories, were also bound by those terms.
- Wells Fargo, the scandal-plagued bank, continues to use forced arbitration clauses and class action bans in customer agreements, and to strong-arm its customers into arbitration. For example, since 2009, it has been litigating against - and forcing into arbitration - customers that it defrauded, specifically by charging them illegal overdraft fees. .
- Hertz, which also operates Dollar and Thrifty, uses shady debt-collector Viking Credit Services to bill customers for costly car damage months after they had returned undamaged rental cars. The court said customers has “agreed” to arbitration because in order to rent the cars, they selected ‘I Agree’ at the automated airport kiosk.
- Washington, D.C.’s Aveda Institute, which charged cosmetology students $26,000 tuition, used students to sell products instead of providing them necessary coursework to prepare for the state board exam. A forced arbitration clause, buried in their enrollment agreement, led a court to throw out their class action, compelling them to privately arbitrate.
- Approximately 57 million customers and 600,000 drivers of Uber, who were victims of the company’s personal identification data breach that the company waited a full year to reveal, were forced to arbitrate all claims because they “agreed to” forced arbitration when signing up with Uber.
- Employees at Fiat Chrysler, including the company’s diversity manager, brought a class action alleging systemic discrimination and retaliation. Six claims were dismissed because of forced arbitration clauses in employment contracts. Two other employees, who joined the company before these clauses were included, were allowed to proceed with a much smaller class action.
- A Red Robin employee brought a class action for illegal wage theft. A class of over 18,500 workers was certified, yet months later more than 2,600 new hires were thrown out of the case because they had “agreed” to arbitration. The court said they could “scroll up or down to review the two arbitration documents before signing,” were able to “download the unsigned Arbitration Agreement as a Word document,” were sent a PDF copy of the signed agreement to their personal email, and then failed to "opt out."
These last two cases show how splitting victims in two can lead to terribly unfair, bizarre results, where victims experiencing the exact same type of wrongdoing but are forced to arbitrate would be unable to benefit from any larger settlement and in fact, could be left with nothing.
It is time for Congress to do something about this!
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