Combating Structural Bias in Dispute System Designs That Use Arbitration: Transparency, the Universal Sanitizer

Abstract

Employers and businesses adopt adhesive arbitration clauses as a means to manage the risk of litigation and perceived “runaway” jury awards. Mandatory or adhesive arbitration describes the power of an economically stronger repeat player to impose an adhesive binding arbitration clause on the weaker, usually one-shot, player. In this brave new world, how can we combat structural bias built into dispute system designs (“DSDs”) that include mandatory or adhesive arbitration clauses? This essay will explore transparency and disclosure as means to that end. First, it will discuss institutional analysis and DSD to examine indicia of structural bias. Second, it will rely on other excellent scholarship to review the current state of the law and instead focus on the relative lack of remedies available to employees and consumers from the courts, Congress, or the executive branch. Third, it examines scholarly proposals to address the gap in remedies. Finally, it explores the various ways employees and consumers might engage in self-help to promote transparency as a means to accountability for biased arbitration systems.

Keywords: arbitration, structural bias, transparency

JEL Classification: D74, D82, J52