If two companies of comparable size want to agree to arbitrate any disputes in a contact, that should be allowed. It saves massive amounts of time and money.

The problem is the disparity between the parties involved when it's a company and an individual.

Forced arbitration also bans class action lawsuits, which weakens individuals even further.

I think forced arbitration should only be legal in actively negotiated contracts (i.e. both parties were active in writing and modifying all the terms), where the proposing party disclosed the implications in plain language, and where agreeing to it was entirely optional for either party (sort of like GDPR consent).

I think those conditions would effectively exclude it from consumer contracts while permitting it when both parties understand and want it.

> and where agreeing to it was entirely optional for either party

That’s really the crux of it, isn’t it? In general it is entirely common in a contract situation for one party to care so much about a particular provision that it would rather not contract at all than contract without that provision. Generally the better the best alternative to a negotiatied agreement (BANTA) for a party the more likely it is to be willing to walk away over a particular provision.

I think the root of the perceived unfairness here is that people think a take it or leave it attitude is not fair. In a Dunbar size world, maybe it isn’t. But you can’t run a company with 100k individually negotiatied employment contracts.

> I think the root of the perceived unfairness here is that people think a take it or leave it attitude is not fair.

I think the root of the perceived unfairness is that forced arbitration concerns using a power disparity to force renunciation by default of fundamental political rights (access to the court system) to the benefit of the powerful party.

The take it or leave it attitude is fine, but only when the parties are on fairly equal footing.

The power disparity remains whether or not we restrict arbitration. If isn't take it or leave it on that, it'd be take it or leave it on salary or vacation days or whatever else. I don't see how tweaking one, in the grand scheme of things, small available contractual term is doing anything about power imbalances generally.

Instead the crux then seems to be "fundamental political rights". I guess I don't see it that way. When you go into court to sue the government, or even in tort against a private party, sure. But in a contractual relationship the right and reason to go to court flows directly from the contract. The fundamental right here is the parties' ability to form an enforceable agreement under terms they agree to. (I should note as a matter of rhetorical fairness that the New Deal Court discarded the notion of "liberty of contract", but as a political philosophy matter I still think it is crystallizes an important notion of freedom.)

> The power disparity remains whether or not we restrict arbitration. If isn't take it or leave it on that, it'd be take it or leave it on salary or vacation days or whatever else. I don't see how tweaking one, in the grand scheme of things, small available contractual term is doing anything about power imbalances generally.

I didn't specific it earlier, but I think restrictions on binding arbitration would also extend to contractural prohibitions on class action lawsuits, since the two typically go hand in hand.

It doesn't eliminate the power disparity, but eliminates new mechanisms that are used to increase it as well as protecting the mechanisms that have traditionally been used to protect against it.

> The fundamental right here is the parties' ability to form an enforceable agreement under terms they agree to.

I disagree, there are other rights that are at least as important that must be balanced against that.

Also "terms they agree to" is a slippery concept, and it's arguable it doesn't apply to 99% of the contracts "agreed to" today (think click-throughs and other walls of tiny text, which are typically neither actively negotiated, read, nor fully understood by one party as an essential matter of practicality).

Hm, What if entities were limited in how many active contracts they could have outstanding in which they had an obligatory arbitration clause in play, based on how many employees they had?

So, like, if you couldn’t have over 2 + 4*log_2(your number of employees) cases where people you either currently employ, or used to employ and are still bound by that clause of their employment contract, are subject to forced arbitration.

(Or some other function. Sqrt might be better than log)

This would still provide some of (hopefully most of) the benefit of having the arbitration, while preventing it from being common or typical amongst the employees, as the proportion of employees would have to be asymptotically zero as number of employees increases.

> I think forced arbitration should only be legal in actively negotiated contracts (i.e. both parties were active in writing and modifying all the terms), where the proposing party disclosed the implications in plain language, and where agreeing to it was entirely optional for either party (sort of like GDPR consent).

That may have the unintended side effect of employers including _even more_ onerous impositions which they anticipate will be negotiated away, making the negotiation "active" as far as the parties are concerned but with the same outcome.

If it were entirely optional, what employee _would_ opt in to forced arbitration?

Thinking more about it, I would imagine employers would offer small incentives in exchange for the forced arbitration clause (like more paid time off, etc) but at least in that case it would be a trade-off made by the employee.

> Forced arbitration also bans class action lawsuits

For me this is the biggest key issue, because it's an attempt to nullify the higher-level mechanism which ought to be preventing abuse.

It’s voluntary whether or not to agree ahead of time to be bound by a conflict resolution method should such conflict arise in the future.