“Left to pursue individual claims only a lunatic or a fanatic sues for $30,” Justice Stephen Breyer wrote in his dissent, when in 2011 the Supreme Court allowed an AT&T mandatory arbitration clause to preclude a consumer class action.
Shortly after the decision, the Arbitration Fairness Act was introduced in the Senate by Sen. Al Franken (D-Minn.). If passed, the act would eliminate forced arbitration clauses in employment and consumer contracts.
The shift to private adjudication is no doubt one of most dramatic and controversial shifts in the legal system. Across all industries and professions, mandatory pre-dispute arbitrations clauses — in which parties agree to have a panel of private arbitrators rather than a court decide disputes that may arise between them — have become a common feature of employment contracts.
Workers regularly sign away their right to take their employers to court for wrongful termination, discrimination, retaliation and wage-and-hour violations. Pre-dispute arbitration clauses are similarly pervasive in consumer contracts dealing with everything from electronics or cars to credit card and phone providers.