A recent study found that 81 of the top 100 companies in America have clauses in their customer agreements that force legal claims to air their legal grievances in arbitration – and typically only after signing a non-disclosure agreement and waiving their right to appeal. In May 2019, JPMorgan Chase joined the consumer-unfriendly trend when it informed all of its credit card customers that they could no longer sue the company in court. The bank previously mandated arbitration for its bank account and insurance customers. Imre Szalai, a professor of social justice at Loyola University, said the move by JPMorgan Chase is part of a larger trend denying consumers the right to litigate their legal claims in court. “The ability to access the courthouse is disappearing for American consumers, Szalai said, citing his own research on the subject of mandatory arbitration clauses.
Mandatory arbitration clauses are often included in the “Terms of Service” that many consumers blindly sign when signing up with a company. This can harm the consumer because arbitration severely limits the rights of consumers. Typically, arbitration allows more limited evidence to be presented, can cap the amount of damages a person is awarded, and usually requires both parties to sign non-disclosure agreements and give up their right to appeal any decision. Therefore, companies with mandatory arbitration clauses benefit from not only having their legal matters resolved quicker but they can also avoid any public relations fiasco by keeping customer’s complaints quiet.