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Forced Arbitration: A Corporate Attack on Our Justice System

About the Campaign

Working families have won important victories on a range of workplace rights and consumer protections, including a higher minimum wage, paid leave, and protections against predatory loans – but they are meaningless unless they’re enforced. Traditionally, workers and consumers could file lawsuits to combat corporate wrongdoing, but most of us have lost our right to go to court.

In May 2018, the United States Supreme...

Working families have won important victories on a range of workplace rights and consumer protections, including a higher minimum wage, paid leave, and protections against predatory loans – but they are meaningless unless they’re enforced. Traditionally, workers and consumers could file lawsuits to combat corporate wrongdoing, but most of us have lost our right to go to court.

In May 2018, the United States Supreme Court approved forced arbitration clauses that prohibit employees from joining together to fight workplace violations, making it almost impossible for employees to fight wage theft, harassment or discrimination. Forced arbitration clauses strip our right to challenge corporate wrongdoing in court. They’re buried deep in most contracts we encounter, from job applications to credit card accounts. When you sign a contract with a forced arbitration clause, your only option to address illegal acts is private arbitration, where companies choose the arbitrator. There is no judge, no jury, no public record, and no appeal.

Public allegations of sexual harassment or unequal pay often give other women the courage to step forward. But many corporations require employees who report gender discrimination to resolve complaints in private arbitrations and forbid them from disclosing their experiences. Forced arbitration protects perpetrators and keeps systemic abuse a secret. Companies are getting bolder about flouting the law, knowing they won’t be held accountable.


The Center for Popular Democracy is working with grassroots organizing groups to win state laws that preserve our right to hold corporations accountable when they break the law. Modeled on the False Claims Act and California’s successful Private Attorney Generals Act (PAGA), the legislation lets all workers or consumers who have been harmed by a company’s unlawful practices join together to bring a public enforcement action. The law is a win-win: workers and consumers expose companywide violations, and the state collects millions in civil penalties from lawbreakers. Because the action is filed on behalf of the state to promote compliance with its laws, courts have ruled that the right to seek penalties can’t be waived in arbitration. In addition to legislation, states and cities can also refuse to award contracts or tax breaks to companies that use forced arbitration to hide bad business practices.

facts & figures

How Forced Arbitration Clauses Affect the Public

  • 93% of people who sign forced arbitration clauses don’t realize that they are losing their right to sue

  • 98% of legal claims are squelched by forced arbitration clauses

  • 60 million Americans -- over half the workforce -- have lost the right to sue their employers with low wage workers, women and African-American workers disproportionately affected...

How Forced Arbitration Clauses Affect the Public

  • 93% of people who sign forced arbitration clauses don’t realize that they are losing their right to sue

  • 98% of legal claims are squelched by forced arbitration clauses

  • 60 million Americans -- over half the workforce -- have lost the right to sue their employers with low wage workers, women and African-American workers disproportionately affected

Percent of Consumer Contracts with Arbitration Clauses

  • 53% credit card accounts

  • 98% payday loans

  • 99% cell phone contracts