Yesterday evening I met with a financial advisor from a large financial company. The meeting was going well and I was ready to sign on for much-needed financial advice until we started discussing the agreement.
First, he told me that the agreement was not a contract. I quickly corrected him and explained that they were one and the same. Then I started flipping through the three-page document. Lo and behold, there it was, in bold: an arbitration clause AND a statement claiming that there is no agreement to enter into any class action arbitration.
I explained to him in my excitable way that I wouldn’t sign the document, explained to him what the arbitration clause meant and its impact on consumers. He was shocked. In a very brief moment he removed the professional mask and showed that he was appalled by the provision’s meaning. I told him about the need to support the Arbitration Fairness Act in Congress. He asked if it would eliminate arbitration. I explained that it wouldn’t – but it would make it voluntary, rather than forced.
He said it was the first time he’d ever heard anyone complain of it. He said that another lawyer-client had crossed out a phrase (not arbitration-related) in a type of insurance contract and the company accepted it. He thought maybe they would do the same for me in this case — cross out the arbitration clause. Then after talking about the issue some more, we both agreed that it was highly unlikely that the company would do so, but that he would try.
I further depressed the poor guy when we were finishing up the meeting by bringing up his employment agreement. He said he signed an employment agreement, and I said that an arbitration clause is likely in the contract. He said, “What should I do, not take the job?” And I said that’s exactly the point. We don’t have a choice when it comes to these provisions. Afterwards, he practically pushed me into the elevator, happy to see me leave.
He really was a nice and very helpful guy – hopefully he doesn’t have an arbitration clause in his employment agreement. Now we’ll see if he can get the clause removed from my contract!
Christine Hines is the consumer and civil justice counsel for Public Citizen.
CS
You were wise to refuse to sign, and I hope he was truly interested in what you had to say about arbitration.
When my husband and I bought our last car, we were ready to walk away from the deal if the dealer didn’t strike the arbitration clause. They did remove it, but later tried to sneak it back in, and we again refused. They again removed it.
Of course, we had no ability to bargain away the arbitration clause in the car manufacturer’s warranty, which referred to state lemon law that required (at leat non binding) arbitration. But we were able to at least get the dealer’s arbitration clause removed. Had their been a dispute w/the dealer (not manufacturer) we retained our legal rights.
Good luck, I hope he’s able to get the co to remove the arb clause. I believe the reason most have “never heard anyone complain before” is that either they have and are lying, or so few consumers know about it that virtually no one has complained so far.
June 11, 2010 at 12:17 pm
Gene
Directv has such a clause. But where it benefits them they ignore the clause and go to Federal court with consumers. Then again, where it benefits them, they force the arbitration clause. Go to the directv web site and read the consumer agreement. Make sure you are sitting down.
June 11, 2010 at 1:15 pm
Susan
We are tackling this issue of mandatory arbitration in the movie Hot Coffee, Is Justice Being Served? Visit our website at HotCoffeethemovie.com to learn more.
Thanks Public Citizen for getting the word out.
June 11, 2010 at 9:08 pm
Public Citizen on Mandatory Arbitration «
[...] Comments Everyone interested in consumer law and your own constitutional rights should check out this post by Christine Hines at Public Citizen’s Citizen Vox blog. Mandatory arbitration is one of the newest ways that your [...]
June 17, 2010 at 2:23 pm