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Corporations get us to waive rights every day


Buying a cellphone plan could make you powerless to sue your phone company if it defrauds you. Using a coupon to buy a box of cereal may mean you give up your right to sue if the food is tainted. Checking your grandmother into a nursing home could prevent you from holding the facility accountable for negligence. “Liking” something on Facebook could sign you on to a legally binding contract that you’ve never read.

American consumers are quietly being forced into contracts with giant corporations that they often don’t understand or even know about and are nearly always powerless to change.

These contracts are hidden in long, unwieldy terms-and-conditions documents. Even people who can decipher the legalese can’t change them. You either agree to sign your rights away to a cellphone service provider, or go without cellphone service at all.

The agreements prevent consumers from taking the corporations to court or joining with others in class actions. We’re increasingly being forced to take disputes into private arbitration when something goes wrong. This David-and-Goliath arrangement is often conducted by arbitrators who rely on major corporations for repeat business, and usually offers no process for appealing decisions.

In the latest example of how far giant corporations are willing to go to prevent Americans from accessing our court system to protect our rights, The New York Times recently reported that the food giant General Mills had added language to its website informing consumers that if they so much as downloaded a coupon or “liked” the company on Facebook, they gave up their right to sue.

General Mills quickly backed off once its tactic came to light. But the incident shows just how far some corporations are willing to take this strategy. Arbitration agreements are quite common in a number of industries, including car dealerships, home construction, and even nursing homes.

And they’re spreading, thanks to the judicial and legislative failure to protect consumers’ rights.

In a series of recent rulings, the conservative Supreme Court majority has given giant corporations the green light to continue this deceptive racket.

One recent case involved Liza and Vincent Concepcion, a California couple who sued AT&T when it turned out that a “free phone” the company had offered wasn’t at all free: The company charged them sales taxes on the undiscounted price of the phone, about $30.

The Concepcions filed a class-action lawsuit to hold the company accountable not just to them but to everyone they’d bilked out of $30 — many of whom had never even noticed the charge.

The Supreme Court ruled 5-4 that the arbitration agreement that the Concepcions had signed when they bought their phone plan meant they would have to go to private arbitration to recover their $30…and so would every single person who had bought the same plan.

This essentially left AT&T off the hook because, as Justice Stephen Breyer noted in his dissent, “only a lunatic or a fanatic sues for $30.”

And in a decision last year, the Roberts Court made it easier for giant corporations to bypass antitrust laws and impose similar unfair conditions on small businesses. In this case, American Express used its market power to force a California restaurant, and many businesses like it, to accept credit and debit cards that charged high fees and to agree on one-on-one arbitration to resolve disputes, which effectively made it impossible to prove their case.

If you doubt the critical role our nation’s courts can play in protecting individual rights, just ask why large corporations are working so hard to keep you out of them. That’s why Democrats Sen. Al Franken, of Minnesota, and Rep. Hank Johnson, of Georgia, have introduced a bill to ban such forced arbitration clauses.

One of our government’s essential purposes is giving powerless individuals the ability to hold powerful interests accountable for their actions. The forced-arbitration scam privatizes justice in a way that cheats consumers and gives corporate malfeasance a green light.

And it takes the government out of one of its most essential functions: helping create a space where everyone, no matter how rich or well-educated they are or how many lawyers they have, can get their day in court.

Paul Gordon is People For the American Way’s Senior Legislative Counsel. Distributed via OtherWords.org



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