Some lawmakers, in debating bills that would ban mandatory pre-dispute binding arbitration clauses in credit card agreements and other contracts, have accused the National Arbitration Forum of being biased in favor of businesses and against consumers.
Because companies steer lots of business to the companies through the binding clauses, some lawmakers argue, the NAF returns the favor with decisions in the companies’ favor.
“They tend to be predisposed to serve the ones that pay them,” said Rep. Henry Johnson, D-Ga., sponsor of the Arbitration Fairness Act of 2009, at a hearing earlier this month. “That’s only human nature.”
Now, a new lawsuit is buffering that claim. Deanna Richert, a former NAF arbitrator, alleges in the age and gender bias suit that the forum does indeed favor business clients, referring to the companies internally as “famous parties.”
Richert claims that the NAF stopped giving cases to arbitrators who ruled against companies, threw lavish parties for arbitrators during which the arbitrators would be lobbied to rule in favor of businesses, and called and asked arbitrators to change rulings adverse to businesses before they were released. The Wall Street Journal‘s Law Blog has the complaint and the NAF’s answer.
The forum responded to Law Blog denying all claims. “The National Arbitration Forum categorically denies all of the claims made by Deanna Richert in her lawsuit, which is a classic case of a disgruntled terminated employee attempting to capitalize on recent negative PR and force a large settlement,” the statement reads.
In the complaint Richert seeks, among other things, a declaratory ruling of her right to sue, since her employment contract with NAF contained – you guessed it – a mandatory pre-dispute binding arbitration clause.