Arbitration and other videos

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Monday, July 11, 2016

Arbitration of Fox News' Anchor's Sex Harassment Claim?

"Lawyers for the Fox News chairman Roger Ailes filed a motion on Friday arguing that the sexual harassment lawsuit filed against him by a former anchor, Gretchen Carlson, should be moved from" court to arbitration, the New York Times reports.  “Gretchen Carlson had an arbitration clause in her contract, stating that any employment dispute regarding her employment at Fox News must be done via confidential arbitration,” Barry Asen, Mr. Ailes’s lawyer, said in a statement.

NYTimes discusses relationship between confidentiality and employment arbitration.

Wednesday, June 22, 2016

The Politics of Arbitration Law and Centrist Proposals for Reform

My latest article, The Politics of Arbitration Law and Centrist Proposals for Reform, is in the Harvard Journal on Legislation. Stephen J. Ware, The Politics of Arbitration Law and Centrist Proposals for Reform, 53 Harvard J. on Legislation 711 (2016).

The abstract:

Arbitration law in the United States is far more controversial when applied
to individuals than to businesses. While enforcement of arbitration agreements
between businesses sometimes raises legal issues that divide courts, those issues
tend to interest only scholars, lawyers, and other specialists in the field of arbitration.
In contrast, enforcement of arbitration agreements between a business
and an individual (such as a consumer or employee) raises legal issues that
interest many members of Congress and various interest groups, all of whom
have taken positions on significant proposals for law reform. The Consumer
Financial Protection Bureau has extensively researched and reported on consumer
arbitration agreements and is expected to issue a rule regulating, or even
prohibiting, such agreements.

This Article both explains how issues surrounding consumer and other adhesive
arbitration agreements became divisive along predictable political lines
and introduces a framework to understand and compare various positions on
them. This new framework arrays on a continuum five positions on the level of
consent the law should require before enforcing an arbitration agreement
against an individual. Progressives generally would require higher levels of
consent than arbitration law currently requires, while conservatives generally
defend current arbitration law’s low standards of consent.

This Article proposes a centrist position. It joins progressives in rejecting
overbroad enforcement of adhesive arbitration agreements due to conservative supported
anomalies in arbitration law’s treatment of contract-law defenses, legally-
erroneous decisions, and class actions. Once these anomalies are fixed,
though, this Article joins conservatives in defending general enforcement of adhesive
arbitration agreements under contract law’s standards of consent because
adhesive arbitration agreements should—contrary to progressive opinions—be
as generally enforceable as other adhesion contracts. This Article briefly concludes
by proposing language for a rule the Consumer Financial Protection Bureau
could adopt to enact the reforms advocated in this Article.

Sunday, June 5, 2016

Circuit Split on Employment Class Waivers


The Seventh Circuit refused to enforce an arbitration agreement’s prohibition on class actions, which would have required the employee to individually arbitrate his wage and hour claim. The Seventh Circuit said the agreement’s prohibition on class actions violated the employee’s right to engage in concerted activity under the National Labor Relations Act.
In so ruling the Seventh Circuit joined the National Labor Relations Board but split from the Fifth Circuit.

Friday, June 3, 2016

Law Professors' Support of CFPB Proposal

The Consumer Financial Protection Bureau has proposed a rule to ban class-action waivers in arbitration agreements.

As the CFPB summarizes:


First, the proposed rule would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service. Second, the proposal would require a covered provider that is involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau.

Many law professors signed a letter supporting this rule.
Further support from Brooklyn Law Professor David Reiss

Saturday, May 7, 2016

Ban on Class Waivers in Consumer Finance Arbitration Coming Soon?

The Consumer Financial Protection Bureau has proposed a rule to ban class waivers in arbitration agreements.

As the CFPB summarizes:

First, the proposed rule would prohibit covered providers of certain consumer financial products and services from using an agreement with a consumer that provides for arbitration of any future dispute between the parties to bar the consumer from filing or participating in a class action with respect to the covered consumer financial product or service. Second, the proposal would require a covered provider that is involved in an arbitration pursuant to a pre-dispute arbitration agreement to submit specified arbitral records to the Bureau.

Hat tip to Opal Nicole Smith

Tuesday, March 1, 2016

Nursing Home Arbitration

Will courts enforce arbitration agreements covering wrongful death claims? Generally, yes, if the patient signed the agreement. But what if a family member signed on the patient's behalf? The New York Times discusses: Plaintiffs' lawyers "argued that unless family members had power of attorney, they lacked the authority to agree to arbitration." This argument often works: "Appeals courts across the country have been throwing out arbitration agreements signed by family members of nursing home residents." Basically an agency law question, although with undertones of unconscionability.

Tuesday, February 23, 2016

Friday, December 25, 2015

Class Waivers in Consumer Arbitration Agreements

A "class waiver" is a contract clause requiring disputes to be resolved individually rather than in a class action. The Consumer Financial Protection Bureau plans to prohibit class waivers in consumer financial services arbitration agreements. Adding fuel to this fire is yet another NY Times article portraying aggressive businesses preying on vulnerable consumers and then depicting the class action as the only practical redress for consumers -- squelched by the dreaded arbitration clause.

The most recent article: "By inserting arbitration clauses into the fine print of consumer contracts, they have found a way to block access to the courts and ban class-action lawsuits, the only realistic way to bring a case against a deep-pocketed corporation."

Wednesday, December 9, 2015

Arbitration Clauses in Credit Cards Not Antitrust Violation

The US Court of Appeals for the Second Circuit affirmed the trial court's ruling that the card issuers' "final decision to adopt class-action-barring clauses was something the issuing banks hashed out individually and internally", not collusively.

Monday, November 16, 2015

Chamber of Commerce Pushes Back Against CFPB on Arbitration

Today's NY Times reports:

The U.S. Chamber of Commerce and others have said the [CFPB]’s findings do not support its proposed rules. “By ignoring its own data that clearly shows major deficiencies with court-based litigation and disregards the real-world advantages of arbitration, the C.F.P.B. has demonstrated its bias for trial lawyers over average Americans,” Mr. Webb, of the chamber’s Institute for Legal Reform, said.
Considerable sums of money are at stake. Late last month, the bond-rating firm Moody’s Investors Service warned that if enacted, the bureau’s proposed rule might leave companies more vulnerable to class actions that could “force changes to company practices that cut into revenues” or “draw regulatory scrutiny.”

Separately, the NY Times writes "the Justice Department issued a proposal to protect military service members from arbitration requirements. Earlier this month, Senator Al Franken, Democrat of Minnesota and a longtime opponent of arbitration, renewed his push for Congress to pass a bill he introduced this year that would prevent companies from requiring employees to go to arbitration."