In 2023, a New York doctor died from an allergic reaction to food served at a Disney World restaurant, despite taking every precaution to notify the waiter of her allergy. Citing the restaurant’s negligence, her widower sued Disney for wrongful death. Disney moved to have the lawsuit thrown out on the grounds that he had signed a forced arbitration clause in the fine print of his Disney+ subscription four years prior. A similar incident occurred in 2022 when a couple was critically injured after their Uber driver ran a red light. The New Jersey Court of Appeals ruled that they couldn’t sue Uber because their daughter had placed an UberEats order that included a forced arbitration clause three months prior. In 2014, a cruise ship employee was raped by a coworker and sued her employer for failing to ensure her safety. Again, a judge blocked the lawsuit because of a forced arbitration clause in her contract.
Forced arbitration clauses are often included in subscriptions, terms of service, employment contracts, and credit card and bank account terms. They state that disputes with a company must be settled by a private mediator, ostensibly a neutral third party, rather than publicly litigated through a lawsuit. Arbitration clauses are not required to have sunset dates, so you may be permanently unable to sue a bank you created an account with, for instance, even years after closing that account. These “infinite arbitration clauses” silence Americans, denying them their constitutional rights to due process and a jury of their peers while allowing companies to escape legal liability and public scrutiny.
Because arbitration is confidential, for every high-profile case like the ones mentioned above, many more go unpublicized. According to the American Association for Justice, the number of arbitration clauses increased every year from 2018 to 2022. Over 98,000 arbitration cases were filed in 2022, up from under 21,000 in 2021. However, the increased volume of cases did not lead to more consumer wins: The total success rate for plaintiffs was 0.7 percent in 2022, down from 3.4 percent in the year prior.
The reason for this low success rate becomes clear when we look at who is doing the arbitrating—not neutral judges and juries but corporate lawyers biased by close ties to the companies. Defendant companies can steer cases toward arbitrators of their choosing, and arbitrators who want to be hired again are incentivized to treat the company favorably. The whole system is one giant conflict of interest.
This rigged system relies on consumers and employees not reading or understanding arbitration clauses buried in the fine print, which calls into question the integrity of their consent. A 2024 survey of around 1,000 American consumers found that 97 percent had created an account that included an arbitration agreement, but most either did not know about it or did not understand what it meant, believing they still had the right to a class-action lawsuit.
Since the 2010s, the Supreme Court has issued a slew of decisions consistently expanding the power of arbitration clauses. In one such case in 2023, Coinbase, Inc. v. Bielski, the majority ruled that district courts must pause litigation if the company appeals the arbitrability of the case. Justice Ketanji Brown Jackson wrote in a dissenting opinion that the court had invented “a new stay rule perpetually favoring one class of litigants—defendants seeking arbitration.”
Corporate consolidation has further broadened the scope of arbitration clauses. Because of conglomeration, a consumer who signs one company’s infinite arbitration clause could be precluded from suing any distant cousins in its corporate family. For example, in 2020, a court ruled that a customer could not sue DirecTV for making allegedly illegal telemarketing calls since she had signed an arbitration clause with AT&T Mobility, and both LLCs were affiliates of AT&T, Inc.
Moreover, subscription services are being newly adopted by every company, from Tesla to HP. Unlike traditional product sales, subscription services are contractual, giving companies greater leeway to insert arbitration clauses. As account-based services like Disney+ gather more and more names into their sinister black books, consumers sign away their right to a fair trial and unwittingly silence themselves.
The growing power of corporations has resulted in a legal system more closely resembling feudal Europe than a modern liberal democracy. As in medieval times, workers and consumers must indenture themselves to rigged contracts simply to access employment or basic goods and services. The constitutional rights to due process and to a jury of one’s peers have fallen into the unaccountable hands of a techno-capitalist aristocracy. Without greater accountability, corporations will continue to abuse consumers and workers. The federal government must use antitrust action to end infinite arbitration clauses before we retrogress into the Dark Ages.