The Agreement You Never Actually Read
Somewhere in the terms and conditions of your phone, your bank account, your credit card, your employer's onboarding paperwork, your gym membership, and your favorite food delivery app is a clause that strips you of your right to take that company to court. It is written in the same dense, indistinguishable legalese as everything around it. You agreed to it by clicking "I Accept." You had no meaningful choice in the matter. And in the eyes of the United States legal system, that agreement is fully enforceable.
This is not a hypothetical. Mandatory arbitration clauses — contractual provisions that require disputes to be resolved by a private arbitrator rather than a public court — now appear in an estimated 60 million employment contracts and the vast majority of consumer financial agreements, according to research from the Economic Policy Institute and the Consumer Financial Protection Bureau. Paired with class action waivers, which prohibit groups of similarly harmed individuals from banding together to pursue collective legal action, these provisions have effectively constructed a parallel justice system — one that is private, largely unreviewable, and structurally tilted toward the corporations that pay for it.
How We Got Here: A Supreme Court Project Decades in the Making
The legal architecture of mandatory arbitration was not always this expansive. The Federal Arbitration Act of 1925 was designed to allow commercial entities of roughly equal bargaining power to resolve business disputes outside of court. It was not written with the intention of allowing a Fortune 500 corporation to foreclose a minimum-wage worker's ability to pursue a sexual harassment claim, or to prevent defrauded credit card holders from seeking collective redress.
Photo: Supreme Court, via www.highsnobiety.com
The transformation came through a series of Supreme Court decisions that progressively expanded the FAA's reach. AT&T Mobility v. Concepcion (2011) held that the FAA preempts state laws that attempt to invalidate class action waivers in arbitration clauses. American Express Co. v. Italian Colors Restaurant (2013) extended that logic further, holding that class action waivers are enforceable even when individual arbitration is economically impractical — effectively immunizing corporations from accountability when the cost of individual litigation exceeds any likely recovery. Epic Systems Corp. v. Lewis (2018) brought the logic into the employment context, ruling that employers can require workers to waive their right to collective legal action as a condition of employment.
Each of these decisions was decided by a conservative majority. Each was argued, in substantial part, with legal briefs funded or coordinated by the U.S. Chamber of Commerce. The Chamber has spent more than any other lobbying organization in American history influencing Supreme Court jurisprudence, and mandatory arbitration has been among its most successful projects. According to a 2019 report by the Constitutional Accountability Center, the Chamber wins before the Supreme Court at a rate exceeding 70% in cases where it files amicus briefs.
What Arbitration Actually Looks Like for Real People
The theoretical defense of mandatory arbitration — that it is faster, cheaper, and more accessible than litigation — collapses under empirical scrutiny. A landmark 2015 study by the CFPB found that consumers who pursued claims through arbitration recovered a median of $172. Class action settlements, by contrast, provided relief to an average of 6.8 million consumers per case, with median individual recoveries of $32 per class member — small individually, but aggregated into meaningful corporate accountability. The difference between the two systems is not just procedural. It is the difference between isolated grievances that corporations can absorb and systemic accountability that changes behavior.
The arbitration industry's structural bias is also well-documented. Arbitrators are not neutral parties in the way that judges, at least ideally, aspire to be. They are typically selected from rosters maintained by private arbitration companies — companies that are themselves paid by the corporations that impose arbitration clauses. A 2015 investigation by the New York Times documented cases in which arbitrators with consistent track records of ruling for corporate clients were preferentially selected by those same clients in subsequent cases. This is not an aberration. It is the logical outcome of a system in which one party controls the selection of the decision-maker.
For workers, the consequences are particularly severe. Sexual harassment and assault survivors at companies including Uber, Google, and Amazon have been forced into private arbitration, silenced by confidentiality requirements, and denied the ability to learn whether their experience was part of a pattern. The #MeToo movement brought temporary legislative attention to this problem — Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act in 2022, which President Biden signed. That law is meaningful and important. It is also narrow: it covers only sexual misconduct claims, leaving the vast majority of employment and consumer disputes fully subject to mandatory arbitration.
The FAIR Act and the Lobbying Machine That Killed It
The Forced Arbitration Injustice Repeal (FAIR) Act would prohibit pre-dispute mandatory arbitration clauses in employment, consumer, antitrust, and civil rights cases. It has passed the House of Representatives twice — in 2019 and again in 2022 — with broad Democratic support. Both times it died in the Senate, blocked by Republican members whose campaigns have been substantially funded by the financial services, technology, and retail industries that benefit most directly from the arbitration regime.
The Chamber of Commerce spent approximately $100 million on lobbying in 2022 alone, according to OpenSecrets data, with the FAIR Act among its stated legislative priorities to defeat. The National Retail Federation, the American Bankers Association, and the tech industry's lobbying apparatus have all coordinated opposition. Their core argument — that eliminating mandatory arbitration would flood courts with frivolous claims and raise costs for consumers — is a prediction without meaningful empirical support. The countries with the strongest consumer protection records, including those across the European Union, function without mandatory arbitration clauses in consumer contracts and have not experienced the litigation apocalypse the Chamber warns against.
Photo: European Union, via blogger.googleusercontent.com
Who Bears the Cost of Legal Silence
The human geography of mandatory arbitration is not random. Low-wage workers — disproportionately women, people of color, and immigrants — are most likely to be employed under contracts with mandatory arbitration clauses and least likely to have the resources to pursue individual claims even in arbitration. Consumers of payday lenders, subprime financial products, and gig economy platforms — again, disproportionately lower-income and non-white — are most likely to be defrauded in ways that are individually too small to litigate but collectively massive.
The class action waiver, in this context, is not a procedural technicality. It is a structural mechanism for ensuring that the people most likely to be harmed by corporate misconduct are the least able to seek redress for it. The right to organize collectively — whether in a union, a class action, or a political movement — is the fundamental counterweight to concentrated private power. Stripping it through fine print is a form of disenfranchisement that operates below the threshold of public attention.
The Blueshift Verdict
A democracy that allows corporations to bury the right to sue in unreadable boilerplate — and then calls the resulting signature "consent" — has not protected justice; it has merely privatized injustice, and it is long past time for Congress to say so plainly.
