Argument in Class Waiver Case Favors Consumers, States

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2 Responses

  1. Bruce C. says:

    Seems to me that what is unconscionable is that a collective entity (a corporation) does not allow consumers to contend disputes on an equal footing (as a class of consumers). What is unconscionable in a contract between a collective and an individual might not be unconscionable in a contract between individuals (or between corporations). That doesn’t sound like the basis of the law or the arguments here, however.

  2. Benjamen R. Meyer says:

    Glad to see something like this coming to court, especially SCOTUS. I certainly think it is an unconscionable and unfair clause – one company I worked for put it to the employee contract; the only recourse was to quit (continued employment was deemed acceptance). Did I really have a choice in the matter? No. Same goes for most companycustomer contracts. The company is fully willing to ignore or not accept contract changes the customer may want for purposes of a having a uniform contract; as a result their customers cannot forgo parts of the contract that they do not agree – it’s a take-it-or-leave-it approach, and often customers feel they have no alternative – especially when nearly every company does it.

    For example, you go into company X to buy a service contract; but you don’t like a clause in the contract and they won’t change it. Their suggestion is to go to someone else. So you go to company Y for the service contract instead, only to find the same thing and equally object. Both company X and company Y claim competition since there are N companies in the field, yet in trying to get the service contract you find all N companies have the clause you object to. Your options are either (i) capitulate and sign with one of the companies, or (ii) try to create a new company in the same field to provide the service contract without that clause. If the barriers are sufficient, then the N companies or even the government could preclude you from creating a new company – for example, if you wanted to create a new land-line telecom business you’d essentially be out of luck given the barrier to entry. Or if you want to start a new cable TV distribution company you will run into local contracts between counties and companies that provide companies with exclusivity for the county.

    Or suppose that company employs this in their employment contract, and then discriminates against a class of people in some way, not necessarily in an obviously illegal way. Their continued employment may be the acceptance of the contract, but how is that acceptance when the individuals do not necessarily have (i) recourse to keep their job and fight it, and (ii) the ability to quickly and easily find a suitable job to replace their current job. Or should we require employers to provide benefits and pay to employees that leave for those reasons until such time as equitable employment can be found to replace their position at the company?

    Thus you may find that even in a competitive field that there is no choice in the matter. The companies can benefit because they can apply the concurrent litigation/arbitration to multiple cases that overlap using the same resources while the other side is barred from joining together as a class.