Consumer Law

Would you like fries with your mandatory binding arbitration clause?

By Deepak Gupta

Stephanie Mencimer at Mother Jones reports on an amazing new low in mandatory binding arbitration:

Mandatory arbitration agreements forcing people to give up their rights to sue are now standard fare in everything from cell phone contracts to Hooters? employment agreements. But the owner of an East Texas Whataburger has apparently taken arbitration mania to a new level. Every public entrance to the burger franchise displays a sign informing people that simply setting foot on the premises means that they are giving up their right to sue the company for any reason, even if, for instance, they get a little e coli along with their fries. Instead, customers will be forced to arbitrate their claims before the American Mediation Association, an organization that seems to consist of three lawyers in Dallas hired by the Whataburger (part of a 58-year-old fast food chain deemed a ?Texas treasure? by the state legislature).

Here's what the signs say:

ARBITRATION NOTICE 

By entering these premises you hereby agree to refer any and all disputes or claims of any kind whatsoever, which arise from the products, services or permises, by way of binding arbitration, not litigation.  No suit or action may be filed in any state or federal court.  Any arbitration shall be governed by the FEDERAL ARBITRATION ACT, and administered by the American Mediation Association.

Why stop at burger joints?  Why not post arbitration notices like these at the entrance to every business, from used car dealerships, to hospitals, to banks?  And why stop at buildings?  How about food, cars, and people?

Full post as published by CL&P Blog on January 31, 2008 (boomark / email).