Tuesday, May 22, 2018

Contracts of Adhesion

So, the U.S. Supreme Court decided a case today regarding mandatory arbitration clauses. Snooze......

The thing about enforcing these clauses, one after another, in supposedly "freely bargained contracts" is that such enforcement fails to account for and/or appreciate the substantial disparagement in bargaining power.

Just last year, the Supreme Court enforced a mandatory arbitration clause in a consumer contract, for telecommunications services I think. The thing about those contracts, though, is that consumers ultimately only have a limited number of choices (how many cell phone carriers are even available in Indy, maybe a half dozen?) and if the subject clauses are in every contract, it is inescapable.

What is to prevent restaurants from routinely noting on their menus (in 5-point font, to be sure) that all disputes of any kind have to be arbitrated, at the expense of the complainant, individually, and in Hong Kong? Nobody would even notice at first, because the disclaimer is so small on the menu. Then, the clause becomes standard on every restaurant menu. When restaurants have compelled you to sue them in a private venue, individually, on the other side of the world, have they not rendered you powerless to dispute anything?

In this latest case enforcing mandatory individual arbitration clauses, the Supreme Court has essentially written a blank check to employers to participate in egregious wage theft. What is to stop a McDonald's franchise from forcing its employees to sign lengthy contracts as a condition of employment that bar banding together to sue for wage theft? Once that McDonald's franchise has effectively prohibited its employees from banding together, it could then steal wages from them (via phony deductions, etc.) to the tune of more than $2,000/year; not until the franchise stole from an individual in an amount exceeding approximately $10,000 would it be financially feasible to hire an attorney for the arbitration. (Not for nothing, consider how this plays out with a doctor who makes 20X what the McDonald's employee makes. It's a lot easier to get to the point of financial viability when you make $250,000+/year as opposed to $25,000/year).

Well, I could go on and on about Justice Goosestepper Gorsuch, who wrote the majority opinion while sitting in his stolen seat, but I'm sure my thoughts on him and the theft of that seat from its rightful occupant, Merrick Garland, are well known.

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