“You may need to agree to arbitrate to see a doctor or go to a given hospital. A trip to Disney will require it … Car rentals, apartment leases, gym memberships, airlines, payday lenders, and nursery homes are known to require them.”
This is from Research Scholar and Lecturer Sarah Staszak’s second book, “Privatizing Justice: Arbitration and the Decline of Public Governance,” published last spring.
Here, she is describing mandatory arbitration clauses, which force people to forgo their rights to resolve disputes through litigation and resort to private arbitration.
Private arbitration involves two parties in dispute submitting their disagreement to a neutral third party, an arbitrator, who makes a binding decision. While traditional methods of litigation require judges to publish their decisions and reasoning and rely on legal precedents, private arbitrators, often hired by the very corporations or institutions being sued, are not bound by these rules. As the name implies, Staszak said this arbitration process is “far less transparent and has an extremely limited appeal system.”
“Arbitration drives legal development underground,” Staszak told The Daily Princetonian. “It’s a whole other system where disputes are decided in private, without contributing to the public’s understanding of law and policy.”
Because arbitrators, unlike judges, are not required to publish their reasoning, arbitration exists without scrutiny from the public or within the legal community.
Almost 10 years ago, when arbitration first came onto Staszak’s radar as a promising alternative to litigation, she had not yet discovered the mismatch between the intended and the actual manifestation of this legal process.
Staszak received her Ph.D. in Politics from Brandeis University and has been with the School of Public and International Affairs (SPIA) since 2016. Her research interests revolve around the intersection of public law, policy, and American political development.
Her first book, “No Day in Court: Access to Justice and the Politics of Judicial Retrenchment,” inspired her to delve into the proliferation of private arbitration as a result of litigation’s growing inaccessibility. Each year, there are approximately 15 million cases in the United States where one side lacks a lawyer. There are also many cases that never make it to court due to changes to the rules that govern civil litigation or its cost.
This problem is at the core of why private arbitration was developed. In her research, Staszak found that arbitration’s origins lay in a liberal impetus in the early 1900s to make dispute resolution easier for those seeking a less adversarial process.
“Arbitration was used between institutions of relatively equal bargaining power, so between unions and their employers, for example,” Staszak said.
In the 21st century, Staszak remarked that more likely than not, private arbitration will be, in power differential, “me or you against Tesla.”
In her book, Staszak argues that this transformation was not accidental, but the result of deliberate efforts by a multifaceted group of actors, such as business-friendly conservatives in government and the private sector, who targeted each branch of government to redirect arbitration’s historical purpose. The rest of the book explains how this process, which she calls “institutional conversion,” panned out.
One of Staszak’s significant concerns is the rise of mandatory arbitration clauses, like those mentioned at the beginning of this piece. Individuals often sign binding clauses unknowingly as part of the fine print for obtaining a credit card, cellphone contract, loan, or in the conditions for getting a job.
Such a power imbalance, compounded by the process's lack of accountability and proliferating entrenchment into every aspect of society, sketches out a concerning trajectory for the American judicial system.
Staszak notes that the Supreme Court has embraced arbitration all the way back in 1987 with Perry et al. v. Thomas, saying “We have a national policy favoring private arbitration,” which she believes will make arbitration more common. The Court’s stance references the Federal Arbitration Act, 9 U.S. Code § 2, that state and federal courts must recognize the valid, irrevocable, and enforceable agreements entered into by parties during arbitration. In dissent, Justice John Paul Stevens and Justice Sandra Day O’Connor both expressed concerns about federal overreach into the states’ autonomies to regulate contracts, but did not challenge the legitimacy of the Federal Arbitration Act.
Resistance to arbitration is growing outside of the courts. Op-eds in media outlets like The New York Times and movements within law schools are bringing awareness to the use of arbitration and its potential pitfalls. On top of that, worker advocacy groups like the National Employment Lawyer’s Association are working to incrementally end forced arbitration clauses, such as pushing for bills ending forced arbitration of sexual harassment claims.
Staszak shared a more grassroots case regarding DoorDash, in which a large number of workers decided to file their arbitration suits at the same time. Recognizing that it would cost them millions to settle these suits one by one, the company went to a federal judge and asked if he could make the employees litigate as a single case instead, to which the judge responded, “This hypocrisy will not be blessed.”
To continue to expand on this project, Staszak hopes to delve into consumer law and consumer rights movement, an area of private arbitration that she feels “[gets] kind of short-shifted in studies of American politics and law.”
Staszak says that research like hers, about the tradeoff between legal access and potential rights abuses, is all the more important, “especially now, when we are in a moment of wholesale attack on things like the Consumer Financial Protection Bureau.”
With her research, Staszak hopes to “jive with the momentum toward privatizing so many functions of the government more broadly, which is something that we are just going to see continue to escalate with the new administration, with DOGE, and with the work that they are trying to do.”
Elaine Gao is a News contributor who also writes about research for the ‘Prince.’
Please send any corrections to corrections[at]dailyprincetonian.com.
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