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You are here: Home / Arbitration Clauses, How they impact your life

Arbitration Clauses, How they impact your life

Arbitration Clauses, Video Transcript

Arbitration clauses and how they impact your rights first let’s talk about what is an arbitration clause these are clauses and contracts that between two parties that provide that any dispute that arises between the parties will be resolved not in the court system but through a private process called arbitration these have been around for decades they’re fine if the parties are of equal bargaining power and they know that they’re entering into an arbitration clause to companies that want to go into a new joint venture they can agree to that to business people that want to start off on a new some new project they can enter in a contract agreeing to arbitration because they know what that is the problem is that arbitration clauses are creeping into more and more contracts where there’s not equal bargaining power consumer contracts of all kinds if you buy a product if you buy a service there’s gonna be an arbitration clause in that contract most likely apps that you download on your phone commonly have arbitration clauses as part of the Terms of Use and employment employment agreements opening day or beginning day papers at your new job it’s very common for there to be a arbitration clause and those employment agreements and in fact that is actually a case before the US Supreme Court right now is a case that concerns whether arbitration clauses in employment papers circumvent the Fair Labor Standards Act which governs things like overtime pay and the ability to create class actions under overtime pay and overtime pay cases so it’ll be interesting to see how that turns out but the the upshot of this all is that arbitration clauses are hollowing away your right to trial by jury so that if you have a dispute with your employer or with the manufacturer or a product that harms you or one of your loved ones you may not be able to have your day in court and exercise your Seventh Amendment right to trial by jury because an arbitration clause that’s in those contracts that you weren’t aware of may force you to be in a private system called arbitration.

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