Arbitration as Wealth Transfer

Abstract

This Essay offers a fresh way to understand and talk about forced arbitration: as a wealth transfer. It argues that the rise and prevalence of forced arbitration clauses should be understood as both an outcome of and contributor to economic inequality, and that the national conversation about economic inequality should therefore include the debate over forced arbitration. Given the extreme levels of inequality in the United States — with the richest 0.1% of the country now holding the same share of national wealth as the bottom 90% — the connection between arbitration and inequality is worth exploring in depth. Here, we examine this connection in three areas: antitrust, consumer protection, and wage-and-hour law. More generally, this Essay seeks to draw attention to the distributive features and effects of civil procedure. While there is growing recognition that changes in areas of substantive law (banking law, for instance, or tax law) may contribute to inequality, less attention is paid to the role of procedural law. Those interested in addressing extreme wealth distribution should recognize procedures — including arbitration — as both a site and source of inequality.

Keywords: Arbitration