You’ve Agreed to Arbitration Six Times Today and Didn’t Even Notice

Good morning!

Your alarm goes off. You reach for your phone. The device, the operating system, and the wireless plan that connects it all come with binding arbitration clauses buried deep in terms you accepted long ago but never read.

You order your coffee on an app to save time. You’ve just agreed to arbitration. You tap your contactless transit pass to commute to work. Arbitration. You check the status of a package from Amazon. Arbitration.

By the time you actually start the day, you’ve probably agreed to arbitration multiple times without even realizing it. Not because you’re careless, but because arbitration is designed to live in the background — quiet, automatic, unacknowledged.

But what exactly is arbitration? In simple terms, it’s fine-print contract language that replaces the right to sue. Instead of taking a dispute to court, you agree to settle it through a private third-party decision-maker — an arbitrator — whose judgment is typically final and cannot be appealed.

In theory, arbitration is supposed to reduce the burden of cost on both parties and improve the efficiency of dispute resolution. In reality, it allows employers to circumvent the justice system, especially when it comes to cases of discrimination or harassment.

So, if arbitration is so ingrained in our everyday lives, why don’t we ever notice it?

Think about that “terms and conditions” box you check. Buried in the fine print is an arbitration clause. In a world where everything is “on demand” and attention spans are rapidly decreasing, consumers aren’t going to read a lengthy document full of legal jargon that waives their litigation rights. Corporations know this, and they’re capitalizing on it, using longer and longer arbitration clauses with increasingly complex language. Uber’s 2024 terms of use update featured a whopping 14-page arbitration clause.

These legal documents are often buried in one-sided contracts that businesses impose as mandatory conditions of employment, which a potential employee has no real leverage to challenge. Workers are faced with the choice of either accepting the contract as-is or losing a job opportunity. And it’s no surprise that the companies that abuse these contracts most often are some of the most anti-worker, like Amazon and Walmart.

It’s worth drawing a line here, not between forced arbitration and no arbitration, but between arbitration without power and arbitration with it.

Union workers have power to fight back against this unfair system, because for them, arbitration isn’t buried in onboarding paperwork — it’s bargained for up front. Unionized workplaces are governed by a collective bargaining agreement (CBA), instead of individual employment contracts. A CBA typically defines the arbitration process very clearly, putting more power in the hands of workers to object to legal violations.

Other than the use of the word “arbitration,” this well-established system used by organized labor has nothing in common with the take-it-or-leave-it, sign-your-rights-away kind of arbitration corporations try to impose.

Instead, union workers help decide how the process will work through their bargaining representative, including receiving paid time off to participate in arbitration, defining what the steps are, and even selecting who the arbitrator can be. The result? A more structured process between two organizations who both have strong resources and experience and are thus more likely to find a balanced and fair resolution. But most American workers are not union members and do not have access to this extra line of defense.

With such an imbalance of power in favor of Corporate America, it’s encouraging to see a bicameral, bipartisan coalition in Congress emerging in support of the Faster Labor Contracts Act — a Teamsters-backed bill that would level the playing field for workers. One of the FLCA’s most important provisions would create a binding arbitration process to ensure that workers who vote to unionize receive a first contract in a timely manner, as they’re supposed to under the law.

Yet politicians like Senator Rand Paul, who have no qualms with Big Business abusing arbitration clauses, have led a major outcry against this pro-worker proposal. Their alligator tears make it clear that their real objection isn’t to arbitration as a matter of principle but to workers having access to it on equal terms as major corporations.

Arbitration has become an invisible, automatic part of our everyday lives. But invisibility isn’t inherently neutral. Someone built this system, and someone benefits from its subtlety. When arbitration is negotiated collectively and with the participation of those who will be impacted by it the most, it can be a fair and functional way to settle disagreements. When it’s hidden in fine print and imposed without awareness, it becomes a way to ensure that harm can happen quietly.

We may begin our days tapping our screens, agreeing to terms we never actually considered, but we shouldn’t have to. Arbitration is already all around us. The question now is whether we want to see it — and if we want to have a say in what it becomes.