Cory Doctorow has pointed out [0] that binding arbitration clauses leave companies open to legal DDOS “mass arbitration” attacks that end up being very pro-customer.
The courts have not looked favorably on the US Chamber of Commerce and other orgs attempting to weasel their way out of fulfilling their contractual obligations.
IANAL but... you can't. You can't require that "you cannot file an arbitration case when there exists another one already that isn't you" as that violates the constitution.
In any case, I hope DDOS attacks on arbitration start up hard. But so far the problem has been that companies refuse to comply with their own rules. It seems very one-sided. This is something the supreme court needs to rule on.
In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.
If they somehow refuse to perform the binding arbitration for whatever reason, then you have a constitutional right to take them to normal court. The Binding Arbitration system is an agreement to not go to court.
If one side of the agreement doesn't live up to the agreement then the agreement is null and void. Since typically binding arbitration is favorable to the company by way of preventing emotionally motivated massive damages judgements, aka "nuclear" verdicts (like the totally justified McDonald's "hot coffee" verdict, for instance) they are still an alright deal for the average person because they typically can resolve things quickly and effectively, and the arbitrator isn't going to just side with the company when they did something wrong.
In bizarro land, maybe, but in the US if one side breaches, the agreement very much not null and void. It’s true that one party’s breach may act as a condition to the other’s remaining obligations, but the contract definitely does not disappear in a puff of smoke just because someone breached. The legal terms for disappearing in a puff of smoke, should you wish to know more, are “void” and “voidable,” generally speaking.
Points for thinking the hot coffee verdict was reasonable, though!
If a company makes you sign a binding arbitration clause and then refuses to participate in binding arbitration, then you can probably sue them for breach of contract.
To my understanding severability clauses deal with legal findings of unenforcibility. And there are usually similar clauses that allow for a voluntary non-exercising of contractual rights to not void the contract (e.g. your landlord doesn’t collect December’s rent as a gift doesn’t mean you don’t still have to keep paying rent in general). I’m not aware of any standard contractual clauses that allow one to just voluntarily fail to perform their obligations and not also void the contract as a whole (barring provisions for repair of breach, but that’s not just unilaterally deciding you’re not going to do your contractual obligations)
I doubt it would be as straightforward as "you can't file another arbitration case"; it would be something more like "we reserve the right to cancel arbitration cases if we find that yadda yadda".
"Because that would be bad for the consumer", they say then, with a straight face. All it takes to get a person to say something like that is a fat paycheck and a broken soul.
No - it's not possible to avoid. However, arbitrators aren't robots, if claims are being filed in a clearly malicious or frivolous manner you can expect a level headed mediator to provide a remedy.
In a case where one million people were legitimately harmed though, this can be absolutely disastrous for the company unless the wronged agree to waive the arbitration clause with the company and pursue something like a regular class action lawsuit. It'd still be more expensive than a regular class action lawsuit however.
What? Just go read the PayPal one. It says very clearly you can only bring arbitration cases on an "individual basis". Which was directly in response to this issue.
"Unless both you and PayPal agree otherwise, the arbitrator(s) may not consolidate or join more than one person’s or party’s claims and may not otherwise preside over any form of a consolidated, representative or class proceeding."
Edit: maybe PayPal was the wrong example here - I definitely saw clauses change after the Uber court case, but it seems the PayPal one had been there longer?
That doesn't make PayPal immune to being overwhelmed by arbitration requests, it just requires clients to file separately (which they generally should be doing anyways).
That means that multiple arbitration cases cannot be joined together - which is actually worse for them, as they have to pay a fee per case, so more cases means more fees to be paid.