Hidden Forced Arbitration Clauses and Your Rights

 

The tagline for Walt Disney World is “The Most Magical Place on Earth.” But Disney’s reputation for magical mouse-themed magic took a serious hit in 2023 when the company went viral for its less-than-magical approach to one family’s tragedy. 

While the company quickly pivoted in light of the social media frenzy that followed, the moment brought an important issue to light: just how easy it is to unknowingly sign away your rights by carelessly clicking through the Terms of Service (TOS) on a website. Here’s everything you need to know about arbitration and how you can protect yourself. 

When Negligence Leads to Wrongful Death

When Long Island couple Jeffrey Piccolo and his doctor wife, 42-year-old Kanokporn Tangsuan, went on vacation to Walt Disney World in October 2023, part of the draw was Disney’s commitment to supporting guests with food allergies. According to their official website, many on-site Disney restaurants will go out of their way to accommodate guests with “uncommon allergy-friendly requests” as well as other special dietary requests. For Tangsuan, who had serious allergies to both dairy and nuts, this had to be a relief. 

Just as they always did, when the couple decided to dine at Raglan Road Irish Pub and Restaurant, an Irish pub-style restaurant located in Disney’s shopping and entertainment district Disney Springs, with their mother-in-law Jackie, they kept Tangsuan’s safety front and center. Emphasizing the severity of her allergies to their server, the couple repeatedly inquired as to whether her meal would be free of nuts and dairy before ordering. In turn, their server helped point out menu items to choose from and even consulted with the chef. 

After ironing out the details, Tangsuan was looking forward to a hearty meal of vegan shepherd’s pie, corn fritters, broccoli, scallops, and onion rings. But when her meal showed up with allergen-free flags that usually come with Tangsuan’s Disney meals, alarm bells went off. 

Still, assured everything was fine by their server, the hungry doctor dug in knowing she would need a hearty meal to power the shopping she intended to do. Sadly, she would be dead within an hour after experiencing an anaphylactic reaction due to the allergens in her meal despite having self-administered an epi-pen. 

Disney’s Attempted Arbitration Loophole

Beyond heartbroken over the loss of his partner, Piccolo knew Disney needed to be held accountable to prevent something like this from happening to anyone else, particularly given Disney’s emphasis on advertising allergen-free accommodations for Disney property guests. The grieving widower filed a lawsuit alleging that Disney failed in its responsibility to guests by touting safe food allergy practices but failing to follow through with their hiring, training, menu, and food handling. 

According to Piccolo’s lawsuit, the couple chose this restaurant because “they believed Disney would have proper safeguards to protect patrons” as "Disney advertises and represents to the public that food allergies and/or the accommodation of persons with food allergies is a top priority at its parks and resorts.”

It should come as no surprise that a corporation as large as Disney would do everything they could to try to avoid responsibility. But what the company did next would leave millions of Disney fans wondering if they signed their rights away when Disney’s lawyers tried to get the suit thrown out, arguing that the couple had agreed to an arbitration clause when they signed up for a Disney+ streaming trial and used the Disney Parks website to purchase their tickets. According to the attorneys, this meant the couple waived their right to sue the company.

For many, the idea that something as innocent as signing up for a streaming video trial could mean they lost the right to file a lawsuit seemed eerily close to the Black Mirror plot “Joan is Awful,” which featured characters signing the rights to their life story away as part of their streaming video TOS. 

Amid the ensuing social media furor, Disney quickly reversed course, with Disney Experiences Chairman Josh D’Amaro releasing the following statement: “At Disney, we strive to put humanity above all other considerations. With such unique circumstances as the ones in this case, we believe this situation warrants a sensitive approach to expedite a resolution for the family who have experienced such a painful loss. As such, we’ve decided to waive our right to arbitration and have the matter proceed in court.”

But just because Disney caved to public pressure doesn’t mean this can’t happen again. According to CNN, fine print meant to shield companies from arbitration is becoming increasingly common. Every day, consumers signing up for new apps or online services hastily click past TOS agreements without carefully reading through the details. 

These are just a few of the companies that have used arbitration clauses into their sign-up TOS in their efforts to shut down lawsuits:

 

Airbnb

Airbnb got out of a wrongful death lawsuit involving a man killed at an Airbnb rental he was not even staying at by pointing to the fact he had signed up for an Airbnb account and agreed to an arbitration clause in their TOS. 

Walmart

When a Black family sued Walmart for civil rights violations after an employee publicly humiliated them by following them and accusing them of shoplifting with no evidence, Walmart got the lawsuit dismissed by citing the TOS arbitration clause one family member signed when they got a job working for Walmart’s delivery service. 

DirecTV

DirecTV attempted to avoid class action lawsuits for calling individuals on a Do Not Call list by citing arbitration agreements those individuals signed when they signed cell phone contracts for AT&T Motility, a company later acquired by DirecTV. 

 

The bottom line: In a world where you can’t download an app or sign up for a service without clicking through terms of service, companies are taking advantage by weaving arbitration agreements in — and just about everyone has signed away their right to file a lawsuit at some point without even realizing it. 

Why Corporations Prefer Arbitration

Arbitration is a type of private dispute resolution that can be done without ever stepping into a courtroom. Rather than letting lawyers hash things out before a jury, both arbitration parties agree to use an impartial third party to help resolve their dispute. 

From a corporation’s perspective, these are some of the main benefits of using arbitration for dispute resolution:

1. It’s generally much less expensive than a trial since things tend to get resolved much quicker via arbitration.
2. A lawsuit can take years, whereas arbitration can be wrapped up within months or even weeks. 
3. Thanks to a century of precedent, lobbying efforts, special interest groups, and opposition to reform, arbitration is minimally regulated. 
4. Arbitration is much harder to appeal than a lawsuit.  
5. Court cases are a matter of public record, but arbitration proceedings can be kept private. 

How Arbitration Affects Plaintiffs

Sometimes, the benefits that draw corporations to use arbitration can also prove beneficial to plaintiffs. Maybe you’d prefer to avoid a lengthy trial, or perhaps there are privacy issues related to a victim in your case that you’d rather keep out of the public eye in this eternally online world we live in. 

But there are reasons arbitration is better for corporations, and most of them tend not to be favorable for plaintiffs:

• Arbitration tends to favor the contract writer, with arbitrators chosen by the company in many cases.
• There’s always the possibility that an arbitrator could be biased or compromised in some way. 
• The discovery process (evidence-obtaining) can be hindered in arbitration. 
• If you’re not happy with the decision, you can’t appeal it.

Arbitration Clauses and Your Rights

The first thing to understand about arbitration clauses is that they’re not just simple terms of service. They are legally binding agreements in which signees agree to waive their right to join a class action lawsuit or file a lawsuit individually. 

That doesn’t mean you should stop signing them — in fact, there’s a good chance you simply can’t avoid it.

Even if you aren’t signing up for online apps or streaming services, there’s a good chance you’re signing hidden arbitration clauses without even knowing it. Many employers force their new hires to sign arbitration clauses as part of their onboarding process, with as many as 56% of employers forcing new hires to sign them, according to the Economic Policy Institute. This represents 60 million American workers who have effectively signed away their rights to sue their employers. And anytime you sign up for a new service, you’re probably signing one. 

These are just a few examples of the types of organizations that embed arbitration clauses in their terms.
 

• Mobile phone providers
• Nursing home networks
• Hospice centers
• Other care facilities
• Credit card providers
• Bank accounts
• Cash cards
• Home warranties
• Contractors
• Business franchises
• Loan agreements
• Student loan agreements
• Internet providers
• Healthcare providers

But there are two things you can do to protect your rights when you encounter them:

1. Stop skimming through terms and conditions. 

It’s one of those things most people do but know they shouldn’t. And with hidden clauses becoming increasingly common, it’s worth taking the time to read through them carefully. If nothing else, take a screenshot and save your terms in a special folder on your desktop or phone to revisit later. 

2. Talk to a lawyer about your rights. 

Sometimes, arbitration clauses can be negotiated depending on the contract, company, and circumstance. A good personal injury attorney can help you work through the options. 

Arbitration Reform is Coming

Although change can move slowly, the good news is that some legislative efforts have begun to move forward that would protect victims from forced arbitration clauses, particularly when it comes to long-term harassment in the workplace where historically, forced arbitration has too often protected harassers from accountability. 

According to the Equal Employment Opportunity Commission, as many as 85 percent of women have been victims of workplace harassment, with the Commission estimating that 90 percent of these incidents remain unreported due to fear of retaliation, particularly in terms of job loss. Such was the case with Fox Chariman Roger Ailes when the company tried  to force news anchor Gretchen Carlson into closed-door arbitration after she accused him of sexual harassment. After Carlson’s public disclosure led to many more sexual harassment victims coming forward, she has become a fierce advocate for putting an end to forced arbitration.

In March 2022, President Joe Biden signed a bipartisan bill preventing forced arbitration in sexual harassment cases. The law stipulates that even in cases when employees have signed arbitration clauses, they have the right to determine whether they choose arbitration for their legal remedy as well as whether they wish to file suit individually or through a class-action lawsuit. 

And as recently as May 2024, the Senate Judiciary Committee moved to advance a similar piece of legislation protecting older Americans from forced arbitration in cases of age-related workplace harassment. 

Help With Forced Arbitration

If you or someone you care about has been forced into arbitration, we can help you understand your rights and determine your options. Whether you’ve been a victim of workplace harassment, medical malpractice, or pain and suffering due to someone else’s negligence, call Tim Gilpin today.