When two parties have a dispute, there are many different ways they can resolve it. In days past, the two parties might have resolved their dispute through a duel with pistols. Many of our disputes our resolved in a more civil manner now.
Under the U.S. Constitution, we have a guaranteed right to a form of dispute resolution which is the right to trial by jury. However, there are time when other forms of dispute resolution may be a good way to resolve disputes. Arbitration is one such form of alternative dispute resolution (ADR) available to parties to a dispute.
Arbitration is like a trial in that both sides put up evidence, but the presentation is less strict than an actual trial and it usually takes less time than a trial. An arbitrator or panel of arbitrators (usually 3) hear the evidence and make a decision. Where parties agree to arbitrate they may decide the arbitration will be binding or non-binding. Even if the parties choose non-binding arbitration, the decision of the arbitrator(s) is often helpful to the parties because it gives them an idea of what jurors might think about their case without having to go to the trouble and expense of trial.
You frequently see binding arbitration in contracts. That’s fine where the parties are of similar bargaining power and actually agree to give up a Constitutional right to trial by jury. But there are too many times when binding arbitration is effectively imposed on one party by another. You might think that could never happen, but it happens every day, usually in consumer transactions. In fact, you probably submit to it at least once a month without even knowing you did. One such case went all the way to the U.S. Supreme Court. It involved a cell phone service agreement (that long paper folks sign but don’t read when starting cell phone service or getting a new phone). Also, when you click agreeing to a license agreement for a computer program or buy a car, you may very well have given up your right to a trial by jury by agreeing to binding arbitration.
General Mills recently got very sneaky and discreetly included terms “… requiring consumers downloading coupons, ‘joining its online communities,’ participating in sweepstakes and other promotions, and interacting with General Mills in a variety of other ways to agree to arbitration in lieu of suing the company in the event of a dispute.“ That’s right, by engaging them on the web, you were agreeing to waive Constitutional rights. Thankfully a strong reaction from consumers on Facebook and Twitter caused General Mills to back down and remove the forced arbitration terms.
Companies impose these binding arbitration “agreements” on consumers because it’s beneficial to the companies. Using social media like was done with General Mills is a good way for consumers to fight back.
