It’s Time to End Forced Arbitration

What is Forced Arbitration?

Many Americans are unfamiliar with binding arbitration clauses, also referred to as forced arbitration clauses or forced arbitration, which force agreeing parties to cede their right to settle potential disputes within the court system. Corporations and businesses often use these clauses in contracts and terms of service agreements with consumers and employers in order to circumvent the court system, usually to their own benefit and often to the detriment of consumers and employees. By accepting or agreeing to a forced arbitration clause, a person essentially gives up the right to settle any related dispute with the other party before a judge (and possibly a jury). These clauses exclude the right to form a class action lawsuit as well. Instead, disputes are brought before private arbitrators who are often biased against individuals. This is a disturbing notion, given that individuals’ must give up their constitutionally guaranteed day in court.

The Problem with Arbitration

Though many Americans are not familiar with forced arbitration, it is ubiquitous. According to Pew Charitable Trusts, nearly 9 out of the 10 largest banks include these clauses in their contracts for basic accounts. Similar clauses can be found in contracts for financial services, cable TV and Internet, cell phones and even Omaha Steaks. Many of these products and services are arguably essential to function in modern American society (though perhaps not freeze-dried meat). So simply refusing to do business with companies that use forced arbitration is not an option for most Americans who need cell phones or access to banking services to function in a modern society. Arbitration clauses are also often found in employment contracts, which can affect an employee’s ability to seek legal redress for issues such as workplace sexual harassment or discrimination. Simply finding another job is not always an option, giving employees no choice in the matter.

Additional problems arise when parties actually engage in arbitration. For example, arbitration relies on private arbitrators to resolve conflicts between parties who are often retained from the American Arbitration Association or other similar groups. Arbitrators often have a vested interest of ruling in favor of the companies that retain their services, despite their insistence that they maintain strict standards and rules to ensure neutrality.

Arbitration issues are not limited to conflicts of interest with the arbitrators. According to the New York Times, there are no rules or regulations that cover the handling of evidence or the summoning of witnesses, as there would be in the judicial court system. Rulings can limit awards and vary by individual. This means two people with the same dispute could receive different results from the same process. Finally, arbitration outcomes are usually kept secret and cannot be appealed.

On the other hand, proponents of forced arbitration, such as the U.S. Chamber of Commerce (which is a lobbying group, not a government agency) and the Heritage Foundation (a conservative think tank), argue that arbitration favors trial lawyers and benefits consumers. Though this is a somewhat valid claim, it misses the point entirely. The purpose of taking a company to court or joining a class action lawsuit is not for personal enrichment, but to hold businesses accountable when they act unethically or defraud consumers. Since many regulatory agencies are underfunded and/or understaffed, the court system is one of the few remaining options for those seeking redress.

In Recent Events

Recently, forced arbitration has led to scandals in for-profit schools and banking. For-profit schools, such as DeVry almost universally utilize forced arbitration clauses in their enrollment contracts, while very few private non-profit universities and no public or state schools employ them. Given the spate of unethical behavior from for-profit schools, that ranges from fraudulent acts to deceptive recruiting, it should come as to no surprise that these institutions would try to keep consumers from holding them accountable and taking them to court.

Further, it recently came to light that Wells Fargo Bank had opened unauthorized accounts in customers’ names in order to meet sales goals. Wells Fargo, like many other large banks, utilizes binding arbitration clauses in its contracts with customers, preventing customers from bringing litigation against Wells Fargo. Recently, the bank has tried to enforce these clauses with the very same customers it defrauded after those customers sued. In effect, Wells Fargo is attempting to utilize forced arbitration to escape the consequences of its unethical behavior.

The Solution

There have been attempts to address the problems with the unfair system of forced arbitration. Under the Dodd-Frank Act, the Consumer Financial Protection Bureau has been attempting to craft new regulations limiting arbitration in the financial sector. The Department of Education has made similar efforts with for-profit schools. Sen. Al Franken of Minnesota and Rep. Hank Johnson of Georgia introduced the Arbitration Fairness Act of 2015, which eliminates the use of forced arbitration clauses in consumer and employment contracts (the full text of which can be found here). Unfortunately, with Congress and the White House under Republican control, any reform in arbitration seems very unlikely.

There is no problem with arbitration, provided all parties involved have knowingly and willingly agreed to it, and were not coerced or given no other option. Ultimately, the proliferation of forced arbitration clauses following several Supreme Court rulings has led to more and more businesses effectively opting out of accountability in regards to their employers and customers.

While the U.S. legal system is imperfect, forcing consumers and employees into a private, justice system only benefits those with large legal and financial resources: large corporations and businesses. Corporations may now be entitled to legal protections as persons, but their rights should not come at the cost of the 7th Amendment, which enshrines rights of real human beings to their day in court. Why should one class of “person” be entitled to justice, while another class is effectively excluded?

Image Source: Google Images; Lieff Cabraser Civil Justice Blog

Private Prisons: Profiting from Families, Controlling Inmates’ Fates

 

While we’ve heard plenty about Big Oil, the gun lobby, and Big Pharma throughout this 2016 Presidential race, few have been talking about another highly influential industry: private prisons. According to ProPublica, private prisons in the United States grew by 37% between 2002-2009. In total, there are now 130 private prisons with approximately 157,000 inmate beds. While the United States comprises 5% of the world’s population, it is home to 25% of the world’s prisoners. It may be no surprise then that the private prison lobby is the largest novelty lobbying group in the United States: $25 million is spent each year and revenues of up to $3.3 billion are reported annually. The two largest prison companies, the GEO Group and the Corrections Corporation of America, have given $10 million to candidates since 1989, including one 2016 Presidential hopeful, Marco Rubio.

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What’s the impact of this growing industry on those who are imprisoned and their families? Private prison revenues are generated by taxpayers and off the backs of prisoners’ families through lockup quotas, prison commissaries, phone calls, and charges for visitation and parole or probation fees. When debt payments aren’t made, inmates don’t receive money sent by their loved ones, and those that can’t pay their parole or probation fees are typically locked up again. This begs the question: Has the U.S. gone too far in allowing private prisons control the fates of inmates?

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Prisoners under Contracts

An estimated two-thirds of private prison contracts require state and local governments to keep the prisons filled at a set rate, usually 90%. In the event that the suggested rate is not met, taxpayers are required to pay for the difference. There is even a lockup quota at the federal level, in which Congress requires at least 34,000 illegal immigrants to remain detained daily as part of the Immigration and Customs Enforcement’s detention budget. The quota has grown steadily each year despite the fact that the population of illegal immigrants has remained steady at 11.2 million since the Great Recession.

While in prison, prisoners have to buy basic supplies from prison commissaries. Though many prisoners work, they can’t afford to provide for themselves, since they usually make 2 cents an hour. Families often pitch in, but providing money for living supplies comes at a cost to relatives. In states like Florida, commissary sales and other transactions are managed through the Department of Corrections, providing contracts to vendors, who offer to pay the highest commission to the state. For example, the Keefe Group’s 2013-2016 contract with Florida’s Department of Corrections states,“the Department will make an award, by Region, to the responsive, responsible bidder submitting the highest percentage commission.”

If an inmate owes the state fees or victims’ compensation, he or she won’t see any money sent by a loved one until the debt is paid off. In the 2013 New York state court case People v. Cympethy Neal, Neal’s debt resulted from a mandatory $300 surcharge, $50 DNA fee and a $25 crime victim assistance fee. Neal pursued deferring payments because she was only making $6 every 2 weeks in prison wages, but the court ruled that Neal was not in compliance with the standard hardship “over and above the ordinary hardship suffered by other indigent inmates”. As a result, the money sent by family and friends was deducted up to 100%, leaving her with 20% of her wages, a mere 62 cents per week.  This sum proved insufficient for buying necessary hygiene items or stamps to send letters to her children.

Financial Burden of Phone Calls Home

The Federal Communications Commission (FCC) recently voted to reduce the cost of prisoners’ phone calls to between 11  to 22 cents per minute, preventing private prisons from charging $14 a minute. As FCC Commissioner  Mignon Clyburn states, phone call charges place an “incredible burden” on the families of 2 million prisoners in the U.S. The FCC will now require annual reports to monitor compliance. Companies such as Securus Technologies are threatening to organize a joint legal action against the FCC with other companies.

State Departments of Corrections make a commission from prisoner phone calls, arguably a kickback from the exclusive contracts given to phone companies, who then pass the cost to the prisoners’ families to make hundreds of millions of dollars every year. Some states have banned this, resulting in significant drops in costs. Sheriffs who depend on commissions for their budgets are threatening to get rid of phone access.

One in three families ends up in debt due to the cost of phone calls and visits. Families such as Lillie Branch-Kennedy’s have to make tough decisions: “I have spent close to $25,000 dollars, maybe closer to 30,000 over the past 14 years, just trying to stay in touch with my son. There is no reason prison agencies and phone companies should be profiting off phone companies like mine, forcing us to choose between putting food on the table and keeping in touch.”

There are currently 2.7 million children with a parent in prison. Twelve-year-old Kevin Reese III, who traveled from Minnesota to DC to see the FCC vote on the new rule, is one of them. “The only way I know my dad is over the phone,” reports Think Progress. “We talk about sports, music, school, girls — things me and my mom can’t talk about. It doesn’t feel good when he can’t call.”

The ones who stand to benefit the most from the new ruling are prisoners whose rate of recidivism will decrease significantly.

Incurring Costs over Virtual Visits, Parole and Probation

Private prison companies are changing the way loved ones see inmates with 70% of contracts requiring that video visitation replace in-person visitation, even though sometimes prisoners and families may just be a room away. Securus Technologies, which has contracts in 2,600 correctional facilities, provides video-visitation services. The Washington Post reports that this is just another way families are incurring costs: What was once free visitation now costs family members about a dollar per minute to use the video system. 

Families continue paying even after a loved one is out of prison in parole and probation fees collected by private companies in 44 states. In many states, parole and probation are taken away, along with drivers licenses if prisoners are unable to pay; instead they are expected to pay with prison time that ultimately generates profits.

Time to Pay Attention to the Private Prison Lobby

The rate at which the private sector has taken over the U.S. prison system is alarming. Not only has the private federal prison population doubled between 2000 and 2010, the industry has become the largest novelty lobbying group, influencing lawmakers and profiting mostly from state contracts and taxpayers. The United States has gone too far in allowing private prisons control the fate of inmates and their families, given that one in three families ends up in debt due to phone calls and visits, forcing families to choose between putting food on the table and keeping in touch. While the recent FCC regulation is a small, positive change for prisoners and their families, the United States has failed to address the burden of lockup quotas, prison commissaries, charges for visitation and parole or probation fees.

Cover photo source: AP/Charlie Riedel

A Glance at America’s Incarceration Problem: Culprits, Costs and Responses

If someone asked you to name the place with the highest incarceration rate on Earth, what answer would you give? Russia, Iran, North Korea, Cuba? In fact, the United States outranks all of these authoritarian regimes in the number of citizens imprisoned per capita. According to an Amnesty International report, the United States has only 5% of the world’s population, but 25% of the world’s prison population, with over 2 million incarcerated citizens and an additional 5 million on probation or parole, despite a steady decrease in crime. The state of Louisiana imprisons more of its citizens per capita than anywhere in the world. Mass incarceration stems from a variety of sources and disproportionately affects minority communities. It also disenfranchises millions and costs American taxpayers billions of dollars, leading to numerous social and economic consequences. What’s behind the numbers of America’s drastic incarceration problem?

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Infographic Source: ACLU 

Culprit #1: Severe Drug Laws

One of the largest contributors to mass incarceration in America is the government’s attempt to curb drug use by implementing a set of policies known collectively as the War On Drugs. The American Civil Liberties Union reports that three-strike laws and mandatory minimums resulting from the War On Drugs often mean severe sentences where individuals may face life in prison without parole for a drug possession charge. Despite the harsh consequences of these policies, drug use has not declined, but the number of those imprisoned dramatically increased.  Over half of prisoners at the federal level are incarcerated on drug offenses, most with no prior criminal record or violent offenses. The War On Drugs has cost the United States over $1 trillion and disproportionately targets minorities. Blacks and whites exhibit similar rates of drug use, yet black individuals are incarcerated on drug offenses 10 times more frequently than white individuals. The War On Drugs has failed to reduce drug usage and has fueled America’s mass incarceration crisis.

Culprit #2: The Privatization of Prisons

The privatization of American prisons has exacerbated mass incarceration. As the number of prisoners has risen, states have struggled to fund prisons and contracted prison services to corporations in an attempt to lower costs. As a result, the number of private prisons rose over 1600% between 1990 and 2009. Operators of private prisons profit from mass incarceration. According to The Sentencing Project, prison contractors have lobbied for policies that perpetuate mass incarceration by donating large sums of money to the American Legislative Exchange Council (ALEC), a public policy organization that supports privatization and measures that result in longer prison sentences, such as three strike laws. Over 40% of state legislators belong to ALEC, evidence of its large influence in state politics. Through working with organizations like ALEC, private prison contractors have helped secure legislation that continues to imprison more Americans.

Culprit #3: America’s Lingering Debtors’ Prisons

A third contributor to mass incarceration is the existence of de facto debtors’ prisons. Many of America’s poorest citizens find themselves in jail due to their inability to pay fines such as traffic tickets and legal fees. A report published by the American Criminal Law Review says that although the Supreme Court set constitutional limitations to imprisonment for inability to pay fines, people still end up incarcerated due to legal loopholes. Some arrests occur not for failure to pay a fine per se, but for other violations stemming from the fee. For example, missing a court-ordered payment can result in an arrest warrant for being in contempt of court. Some states allow private debt companies to add surcharges to existing debts, making it more difficult for poor individuals to pay their fines. People who fail to pay fees often lose their jobs due to their incarceration, perpetuating the poverty cycle. These imprisonments disproportionately affect poor individuals and add to the increasing number of prisoners in America.

The Fiscal Costs of Mass Incarceration

Mass incarceration costs Americans staggering amounts of money. The Hamilton Project compiled a study about the costs of mass incarceration. The report found that the United States spends over $80 billion on corrections expenditures, quadruple the amount spent in 1980. Additionally, it costs $29,000 to house each federal inmate and each US resident paid an average of $260 towards corrections expenditures annually.

The Degradation of Families and Political Rights

The Hamilton Project study also discusses the social implications of mass incarceration. Incarceration has broken up countless families.  2.7 million children in the United States have a parent in prison. An African American child with a father who dropped out of high school has over a 50% chance of seeing their father incarcerated by age 14. In addition, juvenile incarceration decreases the likelihood of high school graduation by 13% and increases the likelihood of imprisonment as an adult by 22%. Racial disparities also exist in imprisonment, with 1 in 3 black men and 1 in 6 Latino men facing a lifetime likelihood of imprisonment compared to 1 in 17 white males. Finally, mass imprisonment causes disenfranchisement. Due to laws that prohibit felons from voting, 1 in 13 African Americans and 5.85 million Americans cannot vote. Mass incarceration bars millions, most frequently minorities, from the political system.

Washington’s Response

Politicians have begun to recognize the growing crisis of mass incarceration. In July, President Obama presented a speech to the NAACP stressing the importance of addressing mass incarceration to help minority communities and save American taxpayers billions of dollars. In addition, Senator and presidential hopeful Bernie Sanders along with three House of Representatives members introduced legislation to ban private prisons, acknowledging their contribution to mass incarceration. Lastly, Republican Senator Chuck Grassley and Democratic Senator Dick Durbin introduced the Sentencing Reform and Corrections Act of 2015, which seeks to reduce penalties for non-violent and first-time offenders, decrease minimum mandatory sentences, and provide opportunities to shorten sentences once in jail.

Lawmakers must pass both bills to address this pressing issue. It is unjust that millions of Americans, disproportionately minorities, suffer in prison under unfair sentences and lose their political rights while corporations profit from their imprisonment. Mass incarceration wastes billions of dollars, breaks families apart, perpetuates poverty, and entrenches institutionalized racism. Americans must press their lawmakers to solve this ever-growing problem.

Image source: The New Yorker

Time to End Felon Disenfranchisement

“Nearly 6 million American citizens weren’t able to vote in the 2014 midterm elections due to their criminal records.”

Vox

“There are more felons barred from voting for Senate in Georgia than there will be voters in Alaska” 

The Washington Post

 

Felon disenfranchisement is the practice of removing the right to vote from an individual who has been convicted of certain crimes. The practice varies by state and it also applies in federal elections. These types of policies include:

  • Prohibiting prison inmates from voting,
  • Prohibiting those in prison and on parole,
  • Prohibiting those in prison and on parole or probation,
  • Prohibiting inmates, parolees, probationers, and those who have completed their sentence (prohibitions post-sentence vary by state) 

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Source: The Sentencing Project

All told, 5.8 million Americans are disenfranchised as a result of their involvement in the criminal justice system, or about 2.5% of the total voting age population. Of the disenfranchised population, 75% of them live in their communities, and 2.6 million of them live in states that impose post-sentence voting restrictions for certain offenses. 

Considering the racial make-up of the felon disenfranchised population paints an even bleaker picture, highlighting some of the racial biases in the criminal justice system and the original formation of these policies in the U.S. One in thirteen black adults are disenfranchised in this nation. In three states – Florida, Kentucky, and Virginia – one in five black adults are disenfranchised. A total of 2.2 million black citizens cannot vote under felon disenfranchisement policies. The criminal justice system as a whole is notorious for racial disparities, and felon disenfranchisement – often termed a collateral consequence of conviction – is just one manifestation of that. 

The concept of felon disenfranchisement can be traced back to English common law, medieval Europe, the Holy Roman Empire, and ancient Greece. “Civil death” was sometimes a consequence of committing a crime, and the civilly dead could not participate politically, could not appear in court, and could not serve in the army. During the European Renaissance, “’outlaws’ could be killed with impunity, since they were literally considered to be outside the law”. The practice came to America with the colonists, but gained importance after the Civil War. States like Alabama and Mississippi designed felon disenfranchisement laws to target the crimes believed to be most frequently committed by the newly enfranchised African-American population. Scholars argue these policies were intended to restrict blacks’ political power and maintain the status quo for powerful and wealthy white elites. Considering this history, as well as the current state of the criminal justice system, there is an undeniable racial disparity in felon disenfranchisement policy. 

This issue also points to a disparity between the ideals of American democracy and its practice. Outgoing Attorney General Eric Holder, in an address this past February, made a call to all states to reconsider disenfranchisement policies, and to “restore the voting rights of all who have served their terms, … completed their parole or probation, and paid their fines.” He calls the practice unwise, unjust, and “not in keeping with our democratic values.” 

The Supreme Court disagrees. In Richardson v. Ramirez, the court upheld California’s felon disenfranchisement law. Section 2 of the Fourteenth Amendment allows for the denial of voting rights for “participation in rebellion, or other crime.” Section 1 of the Fourteenth Amendment grants us all the equal protection of the laws. The court concluded, however, that the Equal Protection clause is not intended to prohibit felon disenfranchisement.

This decision is based on a particular interpretation of the 14th Amendment that some criticize. Critics claim it contradicts other decisions that declare the importance of citizenship and enfranchisement. Justice Brennan once declared expatriation to be “the antithesis of rehabilitation,” suggesting that alienating a citizen from civic participation is counterproductive. Regardless, felon disenfranchisement is constitutional. 

However, it is important to consider whether this practice is healthy for a democracy. The right to vote is one of the bedrocks of our country, yet several million Americans cannot partake, even though many of them have paid their debt. Is it a question of a former felon’s judgment, such that we cannot trust them to vote for the right candidates? Do we fear that former offenders will suddenly commit electoral crimes? These concerns don’t change the fact that these Americans live under American law, and thus should have a say in who is drafting those laws. 

Research also suggests there is a link between successful community reintegration and reduced recidivism. Beyond the criminological research on community engagement and collective efficacy, some research has asked specifically if voting has an effect on recidivism. Uggen and Manza report an association between voting and reduced criminal activity post-sentence. Although this relationship is by no means causal, the authors suggest, “Voting appears to be part of a package of pro-social behavior that is linked to resistance from crime”. As for concerns about ex-felons committing electoral crimes, the data simply doesn’t exist – we can’t know its frequency. Uggen and Manza, however, estimate it’s a negligible amount. If enfranchisement might help, and likely doesn’t hurt, is it not worth establishing nationwide? 

I’m joining  Attorney General Holder and Senator Rand Paul in calling for a change in disenfranchisement practices. I think we can go further, and allow former offenders and those currently serving community sentences (such as probation and parole) to vote. Letting probationers and parolees vote, alongside those who have completed their sentences, sends a signal to these individuals. It lets them know that their communities accept them, can come to trust them, and appreciate their voices. If we want offenders to be rehabilitated and reintegrated into society, they need to feel like a part of that society. Silencing their political opinions is an obstacle to feeling like an equal member of society, and only serves to hinder their reintegration.