In her new book “Privatizing Justice: Arbitration and the Decline of Public Governance in the U.S.,” Sarah L. Staszak looks at the evolution of arbitration as a means of resolving disputes. In recent decades, the practice has shifted from a lower cost, less adversarial, and more efficient tool for handling disagreements between relatively equal parties to a far more private, non-reviewable, and compulsory one that nearly always favors corporations over individuals, who have been profoundly impacted as a result.

“To utilize most consumer products, and increasingly in order to take a job, millions in the U.S. sign away their right to hear disputes in a court of law – regardless of the severity of the claim, and, in many cases, regardless of whether the dispute a involves a right that is protected by law,” says Staszak, a research scholar in the Center for the Study of Democratic Politics.

Staszak’s first book, “No Day in Court,” is about efforts to limit access to the courts, especially in civil cases. In her research, she learned of the extensive use of private arbitration as a means to shield large corporations from legal liability. She addressed the topic briefly in “No Day in Court,” but felt it was expansive enough to warrant a book of its own.

Published by Oxford University Press, “Privatizing Justice” examines the broader institutional, political, and legal dynamics that shaped this century-long transformation and explains why the system that emerged has shifted power to corporations, exacerbated inequality, and eroded democracy.

“My hope is that readers will see the threat that these clauses pose not only at the individual level, but also the extent to which this dramatic change in their use compromises the role that courts play in a democratic system of governance,” Staszak says.

Readers can purchase the book at 30% off by using the code AUFLY30 on the publisher’s website.

The use of private arbitration for resolving disputes in the place of traditional proceedings in court has grown dramati­cally in recent decades. With this expansion has come significant controversy. In 2015, the New York Times ran an extensive three-part series, “Beware the Fine Print,” in which it detailed the dangers of the increasingly widespread manda­tory, binding arbitration clauses that individuals often sign unknowingly as part of the fine print for obtaining a credit card, cellphone contract, loan, or as part of the terms for accepting a new job. In signing these contracts, individuals sub­sequently sign away their right to have a dispute heard in a court of law and all the due process rights that go with it. In effect, these clauses allow corporations to circumvent the courts, “stacking the deck of justice” (as the Times put it) dis­proportionately in their favor. But the consequences for the individual are even greater. This lack of legal accountability not only denies access to the courtroom; in a system of government so reliant on litigation to enforce its laws, arbitration compromises many of the rights and liberties established through the demo­cratic process. In this way, mandatory arbitration may well be considered a fun­damental threat to democracy, a shift from public to private governance.

Today, arbitration is used throughout the private sector, with businesses in­creasingly mandating its use in both employment and consumer contracts. Since the early 2000s, the percentage of workers subject to mandatory arbitration agreements has more than doubled, now incorporating over 60 million workers representing more than half of all nonunion, private sector employees. A recent study estimates that in 2024, 80 percent of nonunion, private sector employees will be prohibited from suing their employers. … These agreements are often nonnegotiable; individuals must agree to the terms in order to take the job. Notably, they are especially common in low-wage workplaces and in industries that are disproportionately composed of female and Black workers.

Arbitration clauses are even more predominant in the consumer realm, where a 2018 study showed that individuals entered almost three times as many arbitra­tion agreements as the total population of the United States in that year alone. They are required to trade in the stock market and to do business with most credit card issuers, banks, cellphone carriers, internet service providers, and mo­bile banking apps. They are also increasingly required for online shopping and participation in other internet platforms, among them Walmart, Home Depot, Best Buy, Snapchat, Dropbox, and Amazon. Many of these companies have agreements that are so broad that they even cover anyone who merely visits their website. You may need to agree to arbitrate to see your doctor or go to a given hospital. A trip to Disney World will require it. As far as Sonos and Vital Proteins are concerned, you have agreed to the terms when you unwrap their product. Car rentals, apartment leases, gym memberships, airlines, payday lenders, and nursing homes are known to require them. Few of these consumer transactions would have been subject to mandatory arbitration prior to the 1980s, just as very few non-union employee contracts had mandatory arbitration clauses until the 1990s. Yet today, it is difficult to assert that would-be employees and consumers retain any meaningful choice to opt out of arbitration, given the lack of options. What is more, very few individuals realize that they have signed these clauses in the first place.