Since the late 1990′s, a growing number of corporations have insisted that their customers and employees sign mandatory arbitration clauses. Most of these clauses ban individuals from bringing or participating in class actions. While not all cases should be class actions (by a long shot), there are some cases where the only way people can receive a remedy is through a class action. In those cases, enforcing class action bans can work enormous injustice on consumers and employees.
Mandatory arbitration clauses are widespread throughout the U.S. economy. Tens of millions of employees are bound by such clauses in the workplace. They are widely used by most lenders,most cell phone and land line carriers, nearly all car dealers, computer manufacturers, most on-line businesses, cable TV carriers, nursing homes, and many other sectors of the economy.
Prior to April of 2011, more than a dozen state supreme courts and large number of federal courts had considered challenges to class action bans in arbitration clauses and had held them to be unenforceable in many circumstances. Several Ohio courts had reached this same conclusion. In Schwartz v. Alltell Corp., 2006 WL 2243649 (Ohio Ct. App. June 29, 2006), for example, the court struck down an arbitration clause where its ban on class actions would undercut the purposes of the state’s consumer protection law… SEE COMPLETE ARTICLE