The Washington PostDemocracy Dies in Darkness

NYT series on arbitration clauses omitted NYT’s own arbitration clause

(Richard Drew/Associated Press)

A just-concluded New York Times investigation has plumbed the world of arbitration clauses, a weapon used by corporate America to steer people away from class-action lawsuits and into an alternative venue for disposing with consumer and employment complaints. These clauses are everywhere, write reporters Jessica Silver-Greenberg, Robert Gebeloff and Michael Corkery. And they “tend to favor businesses,” notes the series.

“Over the last few years,” write Silver-Greenberg and Gebeloff, “it has become increasingly difficult to apply for a credit card, use a cellphone, get cable or Internet service, or shop online without agreeing to private arbitration. The same applies to getting a job, renting a car or placing a relative in a nursing home.”

And, as it turns out, signing up for a big trip organized by “Times Journeys”, a high-end side biz that involves guiding curious travelers on junkets to places such as Cuba, Sri Lanka, Colombia and Iran in collaboration with tour operators. As the promo copy states, “Each exclusive travel experience is inspired by Times content and joined by either a New York Times journalist or Times-selected expert, including Pulitzer Prize winners John Burns, Jeffrey Gettleman, Serge Schmemann and David Shipler.”

Bad things can happen on these outings, given some of the destinations — as the “Journeys” contract makes clear. “If you participate in activities during your Tour, certain risks and dangers may arise, including, but not limited to, the risk of accidents in remote places without access to medical facilities, transportation or means of rapid evacuation and assistance …” reads the document, in small part.

For those who find the trip guides wanting, there’s this provision:

Arbitration and Waiver of Trial by Jury: You agree to present any claims against us within ninety (90) days after the Tour ends and to file any suit within one (1) year of the incident, and you acknowledge that this expressly limits the applicable statute of limitations to one (1) year. In lieu of litigation and jury trials, each of which is expressly waived, any dispute concerning, relating or referring to this Participation Agreement, the brochure, or any other literature concerning your trip or the Tour shall be resolved exclusively by binding arbitration in New York City, New York, according to the then existing commercial rules of the American Arbitration Association. Such proceeding will be governed by the substantive law of the State of New York. The arbitrator(s) and not any federal, state, or local court or agency shall have exclusive authority to resolve any dispute relating to the interpretation, applicability, enforceability, conscionability, or formation of this Participant Agreement, including but not limited to any claim that all or any part of this Participant Agreement is void or voidable.

That’s what you call an arbitration clause, precisely the sort of legal handiwork that the New York Times blasts in three really long and exhaustively reported stories. As far as the Erik Wemple Blog could ascertain, the series didn’t mention Times Journeys’ use of this common ploy. Too bad: It would have made the strong story a bit stronger.

In a statement, the New York Times addressed the matter:

Editors were unaware of the Times Journeys clause prior to publication but probably would not have included a mention of that clause in the series. The vast majority of agreements for The New York Times and related properties contain no such clauses. Times Journeys is a special case because it involves outside partners operating in an industry in which arbitration is a standard.
Times Journeys has never been sued or gone to arbitration.

The U.S. Chamber of Commerce’s Institute for Legal Reform has blasted the New York Times’ series as a biased exercise that leaves readers with the impression that “there are no law professors or judges that think arbitration is better for consumers than class actions. That, of course, is clearly not the case.”

The series ran into a methodological problem that it shares with the paper’s August investigative story on the white-collar culture of online retailer Amazon*: A lack of data. Just as the Amazon story relied on heavy use of anecdotes to depict the company’s culture, the arbitration series sifted through case after case after case:

Little is known about arbitration because the proceedings are confidential and the federal government does not require cases to be reported. The secretive nature of the process makes it difficult to ascertain how fairly the proceedings are conducted.
Some plaintiffs said in interviews that arbitration had helped to resolve their disputes quickly without the bureaucratic headaches of going to court. Some said the arbitrators had acted professionally and without bias.
But The Times, examining records from more than 25,000 arbitrations between 2010 and 2014 and interviewing hundreds of lawyers, arbitrators, plaintiffs and judges in 35 states, uncovered many troubling cases.

Many troubling cases, indeed, that the New York Times unfurls in tick-tock fashion. The series is a must-read for anyone who spends money these days.

(* Disclosure: Amazon’s founder, Jeff Bezos, owns The Washington Post.)