Institutional

Mandatory Arbitration Traps

What it is

Requiring disputes to be resolved through private arbitration rather than public courts, eliminating transparency, jury trials, and class actions.

How it works

Buried in terms of service and employment contracts, mandatory arbitration clauses force individuals to resolve disputes in private proceedings selected and often paid for by the corporation. This eliminates the threat of public trials, jury sympathy, and class actions — the primary mechanisms by which individuals can hold powerful institutions accountable.

Real-world examples

  • •Employment contracts requiring workers to resolve wage theft claims through company-selected arbitrators.
  • •Consumer products with terms of service that waive the right to class actions.
  • •Nursing homes requiring residents to sign arbitration agreements before admission.

Ethical guidelines

  • ●Access to public courts is a fundamental right that should not be waived through adhesion contracts.
  • ●Private arbitration systems that consistently favor the repeat corporate player are structurally unjust.
  • ●Class action waivers prevent systemic misconduct from being addressed at systemic scale.

How to defend against it

  • ►Read arbitration clauses in contracts and understand what rights you are waiving.
  • ►Opt out of arbitration clauses when the option exists — many have 30-day opt-out windows.
  • ►Support legislation restricting mandatory arbitration in employment, consumer, and healthcare contexts.

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