Unconscionable Arbitration Agreements

In Kinney v. United Healthcare Services, Inc., Kinney was hired as a consultant for the use control of Metra Health. United Healthcare acquired Metra Health and asked its new employees to sign a document confirming receipt of the staff manual. The manual included an arbitration policy. One of the issues before the Supreme Court was whether Mr. Heller`s assertion that the arbitration agreement was invalid should be settled by the courts or by the arbitrator. The Supreme Court has previously adopted a general rule known as “jurisdiction,” which states that a challenge to an arbitrator`s jurisdiction should “normally” be resolved by the arbitrator. The general rule is subject to limited exceptions, for example where the challenge can be resolved on a single question of law or on a question of mixed submersion and law that requires only a cursory examination of the evidence. California`s legislature has adopted two new statutes that strengthen the protection of workers who resolve labour disputes.

SB 1007, adopted on September 1, 2016, gives each party to the arbitration “the… Plus The Supreme Court of Canada issued its highly anticipated decision in Technologies Inc. against Heller on June 26, 2020. The majority found that the arbitration agreement in service contracts with Uber drivers was invalid and paved the way for a $400 million class action against Uber. The problem is compounded by recent court decisions, which remove all restrictions on the bias or jurisdiction of arbitrators mentioned in the forced arbitration clauses. A Michigan appeals court ruled that arbitrators are not bound by the same ethical rules that would require a judge to withdraw from a case. In Thomas v. The City of Flint justified its decision on the surprising premise that “arbitrators are not like judges” and would therefore not be disqualified in the event of a “presumption of inadequacy.” Companies are sure to make that judgment, and other equally misguided decisions, and increase their efforts to choose an arbitration body that prefers the company over its customers. One possible solution to this problem could be for the Texas legislature to amend the arbitration provisions of the Texas Civil Practices and Remedies Code.

As I have said before, Section 171.022 already provides that a court cannot impose an arbitration agreement if the court finds that the agreement was unacceptable at the time of the agreement. Unfortunately, this section does nothing to define what might be unacceptable. Section 17.022 could be amended to clarify the term “unacceptable” and state that any arbitration agreement in which a party has the ability to appoint an arbitrator who is not neutral would likely be unacceptable because a biased arbitrator has the power to unilaterally interpret any contentious issue.

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