Forced Arbitration Clauses Mean Franchisors Win

The American Association of Justice just released a report about the extreme harms of forced arbitration. The report is dated this month: September 2019.

Many franchise agreements have clauses that force parties into arbitration. And according to the American Association of Justice’s new report, “An American is more likely to be struck by lightening than they are to win a monetary reward in forced arbitration.” Due to arbitration clauses, many franchiSEES won’t ever even have the opportunity to have their case heard by a court of law.

Forced arbitration is a scam that has been thrusted on everyday Americans. It’s promoted as “faster, fairer, and better for workers and consumers than going to court.” But that’s not true and the American Association of Justice’s report demonstrates why. Forced arbitration favors the corporations. Forced arbitration favors the franchiSORS. The public has been deceived.

So what is the American Association of Justice?

The American Association of Justice is a Washington D.C. organization working to defend our civil justice system. They “continually and effectively block attempts in congress to preempt state civil justice laws, and play a vital role in protecting clients’ rights as they come under attack from insurance, drug, and oil industries and other large corporations that dominate the political process.”

The International Franchise Association is also working to dominate the political process. FranchiSORS are lobbying congress to protect their illegitimate risk free access to franchiSEE money.

The American Association of Justice “provides trial attorneys with information, professional support and a nationwide network that enables them to most effectively and expertly represent clients.”

Their mission is to:

Promote a fair and effective justice system—and to support the work of attorneys in their efforts to ensure that any person who is injured by the misconduct or negligence of others can obtain justice in America’s courtrooms, even when taking on the most powerful interests.

About their new report they write,

Forced arbitration is a rigged system designed by corporations in which injured workers and consumers have no meaningful chance of finding justice. Forced arbitration requires Americans to “agree” to surrender fundamental constitutional rights – often without ever realizing they’ve done so. When corporations harm workers and consumers by cheating, stealing, or even breaking the law, cases that should be heard by a judge or jury are instead funneled into a secret system controlled by the wrongdoers in which there is no right to go to court, no right to a jury, no right to a written record, no right to discovery, no transparency, no legal precedents to follow, no opportunity for group actions when it would be too difficult or costly to file a claim alone, no guarantee of an adjudicator with legal expertise, and no meaningful judicial review. Without such checks and balances, the deck is stacked heavily against workers, patients, and consumers, and systemic misconduct is allowed to continue in secret.

Forced arbitration’s proponents counter that the process is faster, fairer, and better for workers and consumers than going to court. However, this comprehensive analysis of the self-reported data provided by the arbitration organizations makes clear that forced arbitration is not an alternative judicial process, but instead eliminates claims, immunizes corporations, and allows abuse, discrimination, fraud, and essentially all other corporate wrongdoing to go unchecked. Americans are more likely to be struck by lightning than they are to win a monetary award in forced arbitration.

Our justice system isn’t working. Consumers and franchiSEES are signing away their constitutional rights — often without any awareness that they’ve done so. The contract gets signed. The contract has a forced arbitration clause. The consumer and the franchiSEES either don’t know that the clause is there or they’re falsely told that arbitration will simplify the justice process for them.

But what the forced arbitration clause really means is that consumers and franchiSEES will have a higher likelihood of being struck by lightening than receiving justice if they are harmed by the corporation or the franchiSOR.

Theoretically speaking, every American has a chance of being struck by lightening and, also theoretically speaking, every American has a chance of getting into forced arbitration. According to the American Association of Justice, there are “over 800,000 arbitration provisions permeat[ing] our everyday lives.” All Americans sign these agreements without knowing it when they quickly agree to the ever-increasing long consumer contracts necessary to receive services in the United States.

But franchiSEES are signing contracts with forced arbitration clauses AND clauses that mean they will lose their entire livelihoods and life savings if something goes wrong.

That means that once the franchise agreement is signed, if anything is amiss, the franchiSEE can say goodbye to everything they own and the franchiSOR can use the franchiSEE’s money to expand the franchiSOR’s business without any risk to the franchiSOR.

What a horrific inequity. The claim to consumers and franchiSEES that arbitration is fairer is false.

And the claims made to consumers and franchiSEES that arbitration is faster is also false. The American Association of Justice had to rely on self-reports from arbitration participants in order to compile their report because the consumer arbitration providers manipulate the data to, assumedly, cover up what’s really going on.

Screenshot about data manipulation from the AAJ's report on forced arbitration

For example, the country’s largest consumer arbitration provider, the American Arbitration Association, deletes cases from a dataset of “closed cases” by file date instead of closed date, effectively “systematically scrubbing claims that take a long time from its database.”

They manipulate the data to make the claim that arbitration takes less time and then sell consumers and franchiSEES on the value of forced arbitration clauses in contracts based on the claim that they’re faster.

Er…. so much corruption.

So much corruption that favors corporations and franchiSORS and defrauds consumers and franchiSEES.

Don’t buy a franchise. The United States needs to fix a few things first.

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