Just Opt Out!

I recently got this in the mail.


It must have been important, because the accompanying bank statement took pains to clearly refer to it. Basically they are changing their terms so that you have to submit to “Binding Arbitration” in the event of a dispute. Naturally I opted out immediately; there’s nothing in it for me.

I’m not picking on PNC bank; I’ve seen this many times before. It seems that every contract of employment, service agreement, mortgage agreement — in fact, just about any type of legal agreement — has a “Mandatory Binding Arbitration” clause in it somewhere.

The purpose of arbitration is to resolve problems without going to court. That sounds like a Good Thing… until you ponder one simple question: Who pays the Arbitrator? If they (employer/bank/service/bigcorp) is paying them for their services, how can they not be biased? there is a classic textbook conflict of interest — which Arbitrator would bite the hand that feeds them?

Here in the US, The first amendment to the Constitution provides the right to petition (to the courts) for redress of grievances. The Supreme Court has ruled that this does not apply to private transactions, which is all well and good until someone asks: so what’s to stop everyone from doing this? eBay and PayPal — two of the most evil companies around, in my opinion, both did this recently (and made it really difficult to opt out), and these clauses are cropping up in rental agreements and loan paperwork.

There’s a simple solution for this: change the law so that unilaterally-enforced (“take-it-or-leave-it”) Arbitration requirements cannot preclude or pre-empt the courts. I’m ok with Arbitration as a pre-litigation step to avoid the need for a lawsuit; what I am not ok with is Corporations using it to sidestep Litigation entirely.

This is clearly Tort Reform by stealth, and it must be stopped. Until that day, Just opt out.

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