Take the "court room" TV shows like Judge Judy, they are an example of binding arbitration that both parties benefit from. The producers look for cases pending in small claims court and offer them to drop their case and settle their dispute in arbitration instead, that arbitration is what's shown on TV. The show pays all parties an appearance fee plus travel expenses and the show pays any judgement that is awarded instead of the defendant. Since it's not a judgement it doesn't show up on public records so it wouldn't affect the defendant's credit report or public records.

Being forced into binding consumer arbitration is certainly terrible and ought to be illegal. Arbitration should not be forced when one party has significant less power than the other. Especially when only one party gets to pick the arbitrator.

I agree that the kind where both parties come together and agree, for a specific case, to engage in arbitration and be bound by the result is OK. The kind where you agree beforehand, when no damages have occurred, that if any case comes up then you will both go to arbitration instead of court, is not OK.

Look at the NFL and the players’ association. They have an arbitrator, the very capable Professor Stephen Burbank, handling disputes. Both sides (and the courts) strongly prefer this to having to go to court.

Arbitration is more controversial when foisted upon consumers in contracts of adhesion, i.e. the take-it-or-leave-it contracts you sign all day at stores, amusement parks, websites, etc. Also very controversial is that arbitration clauses are now being used to prevent class action litigation altogether. In those cases, the Supreme Court has nevertheless upheld it through a very broad reading of the Federal Arbitration Act.

Another way to state the same thing: very few people enter a contract contemplating that they will be the one breaching it, so they are willing to agree to a system for efficiently adjudicating conflicts. But circumstances change and make breach attractive for a particular party, and at that point they will want to protect their advantage, fairness to the other party be damned.

I think you're justified in having concerns about arbitration, but I don't think the line that you're drawing is the right one. Focusing on the nature of the relationship between the parties might be a more fruitful approach. I don't see any reason why two sophisticated entities, truly engaged in back-and-forth negotiations where each has leverage, should not be allowed to agree to binding arbitration between them for future disputes.

For broad definitions of 'people', I don't think this is true. I am utterly certain that businesses enter into these contracts secure in the knowledge that it is much more likely that wrongs will be alleged against them under the contract than that they will need to allege wrongs against the contractee, and that businesses feel that arbitration is likely to favour them. If businesses didn't believe at least the latter, or even if there were just divided opinions, then arbitration clauses would not be included in every. Damn. Contract.

I think this is the key point. If there's a power disparity (commonly, adhesion contracts), the favored party should not get to pick the arbiter.

Which is fine. Maybe something like this shouldn't exist until we have the technology to make it foolproof. At least to the extent where the expected lawsuit frequency is something Amazon is willing to take on.

I'm a litigator and I'd rather arbitrate small disputes. Litigation is absurdly expensive and slow.

I've had great experiences with AAA arbitrators. They were fair and reasonable. They kept costs down too.

My biggest complaint about arbitration is that its too much like court. I thought it could have been more streamlined.

I've even used it as a consumer. When Sprint kicked me off their service for using BitTorrent, threatening arbitrator got them to buy back my two month old phone.

Plaintiff's lawyers hate arbitration because they like dumb juries.

Even if socially not fair, they agreed to a contract that seemed like a very good deal at the time. That's because of the costs/risks they haven't foresee at the time.

I mean, Maybe I'm just an old man and you should get off my lawn but jesus, what could possibly go wrong here? You give it away willingly then expect there to be no abuse? Why would they give you the right to sue? You just gave them a key to your house and they assume you'll accept any licence because you're so desperate for the convenience that you won't say no anyway.

If they wanted to install an amazon locker on my front porch, that would solve the problem for everyone. But that's not a cool project to work on with computer vision so . . ..

If they just went, "We'll do our best, but if anything goes horribly wrong you're fucked, sign here," then whatever. I wouldn't sign up for it anyway, but at least they'd be honest.

But to say that they will "correct the problem" if anything goes wrong, but force you into binding arbitration, is just wrong.

Most companies will take as much as you give them. Seems like an easy win in this customer demographic

The only reason not to lie would be real negative consequences, and those don't happen so much in the fake news era.

I bet their designers thought this through and while I think your "cool computer vision project" argument still stands, I believe the real reason is that everyone who owns/rents living space actually has a front door with space for packets behind said door.

My point is that the way to fix the stated problem is with a lock box and for people who that doesn't work it's a cost of business (as it is now). But if you bring that number down to 2b instead of 7 with a one time cost of lockboxes, you've solved the stated problem.

What they have now is, I think, a choice some people might still make given the trade-off: is Amazon more likely to abuse the key you give them? or are your packages more likely to get stolen off the porch? I've lived in neighborhoods where that cost-benefit would make total sense.

  an amazon locker on my front
  porch, that would solve the
  problem for everyone

You can't charge for the box upfront without killing customer acquisition - most companies give new customers a discount, not a charge - and if you give the box away, you're $50+ in the hole for a customer who may never shop with you again, and you've got to charge more to recoup the costs of the box.

At $50/box, I can outfit 20 million homes for 1 billion which is a 1x cost. If they are really loosing 7b on package theft every year, the one off loss of box cost should start offsetting that right away. A quick google shows that there are 90 million prime members in 2017, so they could do a box per prime member and pay it off in 9 mo. The second year they just save 7 billion. Am I missing something?

I doubt there's a scenario in which you can claim Amazon did anything criminal. But IANAL either.

Would they experience clogging, in the short term?

Would fees increase to help fund expansion (and deter suits until expansion can accommodate the increased number of filings)?

Courts don't cost that much in the grand scheme of things, so even if we had to expand them by a factor of 2 to handle all the arbitration cases, that would be entirely doable.

I would be interesting to know just how much volume arbitrators see, and how many of those might be expected to turn into court cases in the absence of binding arbitration clauses.

That is what it's main use used to be.

Sorry this may seem personal but my own experience is that any phrase ending with these words is usually a good indicator of cluelessness.

It often means: I don't understand the motivations and reasons of the parties involved, I disagree with free and voluntary contracts and my opinion should override the will of the signing parties.

Needless to say, there are many unintended consequences, a "talk and don't ask or listen" attitude and a naive egocentrism at play that is also often prevalent in politics.

There are lots of "free and voluntary" contracts that are illegal. You can't sign away your life or your freedom. You can't even sign a contract where you agree to work for $4/hour. In many jurisdictions you can't sign away your right to work for a competitor. You can't sign away your right to privacy or use of the legal eviction process in a rented apartment.

It's generally agreed upon that there are certain rights that are so important you can't sign them away. It seems to me that access to the courts should be one of them.

Binding arbitration and non-competes, are both disgusting anti-business, anti-American, anti-worker, anti-innovation, anti-rights that need to be killed.

These two horrible tactics have crept in since 2000 into nearly everything.

Signing away your right to compete and your right to use the legal system should both be illegal and have no place in America. How did we let this happen?

For non-competes, NDAs should suffice.

Arbitration should be a step towards legal rather than supplanting it. Many times arbitration is better for both parties in terms of cost/time but when it isn't people shouldn't be signing away the right into forced arbitration to go further.

I know one software developer personally who has been screwed over by a non-compete. I know others who simply ignore them, which is dangerous since different states have rules differently on their enforceability.

It's a far departure from other markets I've worked in. I've personally never even asked behaviour questions during an interview, and really I think you can get a good judge of behaviour just by watching the candidate answer technical questions.

I'm not sure if non-competes are the norm. I have a feeling they might be as they recently passed laws to ban them for low income earners. I've only had one job offer, and they refused to remove it. I have no problem signing NDAs, IP wavers, patent wavers, etc. But I refuse to sign anything that restricts my right to work after a company stops paying me. If it turns out all of them do the same thing, I might have to head back to the west coast.

I refused to sign it.

Of course, that's trading justice for money, which most people would agree is a terrible idea. Of course, that isn't reflected in the actual state of the law.

There are parts of forced consumer arbitraiton that companies do not like, but there's too much upsdie to precluding class actions. Things companies don't like include: the high up front cost and the lack of appeals.

There's nothing legally preventing arbitrators from being vehemently pro-consumer. The incentives prevent it but, legally, an arbitrator could award a crazy amount of money to a consumer on a tenuous basis and there's little that could be done. It's interesting that no such examples exist, however.

There are obvious incentives for the arbitrators to favour the people paying them - individuals are not going to be doing a lot of business with them, companies are.

He says exactly that in his comment. There is no law stopping them from doing it.

In my haste, I read that as "there is nothing stopping them from being pro-consumer, so there is no reason to assume that the judgements favour the businesses" for some reason.

One contract along those lines that I saw basically goes like this: each party picks its own arbitrator (presumably biased toward that party, whatever). Then those two arbitrators together select a third arbitrator, who will actually arbitrate the dispute.

Of course that's not what binding arbitration clauses look like, at all.

Are the arbiters really hired by the company?

As for the hiring part - the business pays most of the arbitration fees, but the consumer is on the hook for a nominal amount plus any attorney fees and potentially extra costs like expert testimony.

However, what Amazon does here is just wrong.

Arbitration is legal because of freedom of contract.

There is nothing "obviously terrible" about arbitration per se. When it is included in a freely negotiated contract between parties of equal bargaining power it is hard to find anything wrong with it.

The problem is when the parties do not have anywhere near equal bargaining power.

[1] https://scholarlycommons.law.case.edu/cgi/viewcontent.cgi?ar...

I'm talking about consumer arbitration, which is as you say, inherently unbalanced. Yes, I'm sure there are situations where it's a good tool and I'm not saying ban arbitration completely, but right now we can see the damage from it being misapplied.

That is, there is no benefit to agreeing to it at contract inception, if it were as stated: cheaper and impartial, i.e., a better court.

Indentured servitude is just contracting. Do you think it should be legal too?

My point is that because it is implied by freedom of contract, it is by default legal until we decide to make it illegal.

No, it's legal because of the Federal Arbitration Act passing in 1925. Prior to that, waiving of such rights "in advance by agreement" was explicitly disallowed, as SCOTUS determined in Insurance Company v. Morse (1874).

This is terrible because it leads to unjustly excessive punishment for smaller crimes if someone wants to exercise their right to trial, and people being told to just take the deal when innocent because a 1% chance of 10s of years of prison just isn't worth the risk when the alternative is you are out in months, for example.

It made me so furious because most people don't understand what they're giving up, and they won't understand until they get into an accident and learn they signed away their rights years ago. The way agents sell Limited Tort gives you a completely inaccurate impression of the potential consequences.

That sort of thing should absolutely be criminal.

So even if you're injured badly enough to need a year of physical therapy for full recovery, you would likely get no money for your pain and suffering under Limited Tort. Without Limited Tort you'd probably get anywhere from $30,000 - $100,000 for that amount of pain/suffering, loss of enjoyment of life, etc.

You can look up info on "piercing the tort threshold" if you're curious about specific injuries that are severe enough.

Do you think quantifying pain and suffering has a positive value even if its very hard to come up with a meaningful way to define suffering in terms of dollars?

1. Yes. Suffering isn't necessarily limited to some brief interval of time. For example, disfiguring injuries can impose suffering (employment discrimination, loss of consortium, etc.) throughout a person's post-injury lifespan. Money can mitigate burdens imposed by such effects of injury.

2. I don't know. But I would estimate the conversion factor for third-degree burns over 40% of a kid's body as greater than that of a kid's having lost a hand. YMMV.

3. Yes, I do.

If you're injured to the point where it impacts your ability to work, or you need extra care from someone... of course it offsets it.

For a furniture purchase.

With all that complaining about signing away your right to sue and work, why do you think it's OK to sign away your right to speak? Serious question.

NDAs are also bs mostly but they cover company specific confidential information and possibly information on clients, contractors, employees etc. All of that is fair to not speak about as that is their property and what they are doing.

Non-competes want you to usually stop using your skills that you brought to the company, with other companies. It is really absurd when a company that wants a 6-month contract wants a non-compete for 2 years, laughable.

Not discussing confidential material shared with you on condition of your employer with an NDA is quite similar IMO to not sharing material information about a company's health days before their public earnings call. 1st amendment rights are not absolute. I'm not allowed to engage in libel, yell "Fire!" in a crowded theater, etc. I think abiding by NDA's about internal, confidential information is analagous and helps promote real, fair competition.

Every time you say, "yell 'Fire!' in a crowded theater," a civil rights lawyer is forced to kick a puppy.

https://www.popehat.com/2012/09/19/three-generations-of-a-ha...

Imagine a physician signing a non-compete. What's he supposed to do then? Not practice medicine and go be a consultant or something?

My nephew was asked to sign a non-compete in a sandwich shoppe, to protects the trade secrets of making a ham sandwich!

This is not related to 1st amendment; this is no law being passed by congress or any government body. Nothing prevents a person from speaking after an NDA is signed - they won't get tossed in jail, because no law was broken. However, after doing so, they will be responsible for any civil penalties they agreed to when they signed the contract.

So if you sign something that severely penalizes going out on your own and competing against your employer, they're going to jump on that and treat it like a lifeline because it very much is exactly that.

Agreed. Here's how I look at it:

If a company really screws you over, you can sue. It's a lot of time and money, but it's worth it for a big problem. But what if the problem is small?

If I get screwed out of $5 by a dodgy company, I won't bother to sue. But if they've done the same to a lot of people, a class action lawsuit makes it worth some lawyer's time to go after them.

Arbitration clauses destroy that. Without class action, we need much more vigorous government intervention. Failing that, consumers lose the trust in the marketplace, harming commerce and making everybody poorer. And we'd likely see more proactive regulation as well, reducing innovation.

Don't sign the agreement if you don't like it.

For example, a contract in which I forfeit my right to life or ownership of my own body would be considered invalid.

The same should be true of a contract in which I forfeit my right to sue. Half the point of the courts is to serve as a final arbiter when a contract is insufficient.

I'm not sure I see the relation to powers of attorney. Are you saying that granting PoA to another person is similar to granting enforcement rights to an arbitrator?

If mandatory binding arbitration included as part of your standard interaction with businesses is a net negative for 99% of people and a positive for business owners and large stock holders there is no particular reason why the 99% can't vote not to allow the owners to do that.

I mean, even if you have the best of intentions, it's still nice to have all the cards stacked in your favor for your own protection.

Why do you want to interfere and limit my right to execute a contract?

However, there's a strong opinion (e.g. encoded in EU law) that the standard contract forms offered by companies to consumers are not really properly negotiated contracts (even if consumers willingly sign them) and thus in such contracts you're not allowed to enforce a certain set of terms that are considered abusive. One of such terms is a binding arbitration clause.

Your customer is free to negotiate and make a contract containing such clauses with you, and then it'd be valid, but if you simply get all your customers to sign on the dotted line under such a clause, it's understood that you don't really have obtained informed consent from any of them.

If Amazon were signing a contract with Google or Apple, I assume that they both would have relatively equal negotiating power and access to information. With you or I? I highly doubt I can afford it.

That's what California does with non-competes, it (figuratively) tells the company it is pretty cool that they have that contract and good luck.