A NEW LEGAL FRAMEWORK FOR EMPLOYEE AND CONSUMER ARBITRATION AGREEMENTS

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              A NEW LEGAL FRAMEWORK FOR
                EMPLOYEE AND CONSUMER
                ARBITRATION AGREEMENTS

                                              Imre S. Szalai*

                                         I.    INTRODUCTION

     With the nationwide focus on widespread sexual harassment
throughout American society, many questions are being asked.
Such as: how did this harassment fly under the radar for so long;
what type of social and legal change is necessary to prevent sexual
harassment in the future; and, what were the contributing factors in
this epidemic? This Article focuses on one small factor that likely
helped mask sexual harassment in the workplace: the widespread
use of arbitration clauses in American society. This Article pro-
poses a new legal framework to regulate the use of arbitration
clauses so that victims of wrongdoing are better protected in the
future.
     More than sixty million workers are covered by arbitration
clauses, and eighty percent of the top companies in America have
used arbitration clauses for workplace-related disputes in recent
years.1 Because of arbitration clauses, millions of Americans can-
not access the public court system and instead must have their
claims resolved before a private arbitration tribunal. When former
Fox TV host Gretchen Carlson sued the CEO of Fox News, Roger
Ailes, for sexual harassment, Ailes tried to enforce a binding arbi-
tration agreement in an attempt to silence Carlson and remove the
dispute from the courthouse and the public eye.2 The arbitration
agreement between Fox and Carlson purported to impose a com-
plete shield of silence regarding the alleged harassment by stating

    * Judge John D. Wessel Distinguished Professor of Social Justice, Loyola University New
Orleans College of Law.
    1 Alexander J.S. Colvin, The Growing Use of Mandatory Arbitration, ECONOMIC POLICY

INSTITUTE (Sept. 27, 2017), www.epi.org/135056; Imre S. Szalai, The Widespread Use of Work-
place Arbitration Among America’s Top 100 Companies, THE EMP. RIGHTS ADVOCACY INST.
FOR LAW & POLICY (Sept. 27, 2017), http://employeerightsadvocacy.org/wp-content/uploads/
2018/03/NELA-Institute-Report-Widespread-Use-of-Workplace-Arbitration-March-2018.pdf.
    2 Erik Wemple, Roger Ailes Opts for Secrecy, Cowardice in Face of Gretchen Carlson Suit,

WASH. POST (July 9, 2016), https://www.washingtonpost.com/blogs/erik-wemple/wp/2016/07/09/
roger-ailes-opts-for-secrecy-cowardice-in-face-of-gretchen-carlson-suit/?utm_term=.1204
ff88e435.

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654 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

that “[s]uch arbitration, all filings, evidence and testimony con-
nected with the arbitration, and all relevant allegations and events
leading up to the arbitration, shall be held in strict confidence.”3 If
such agreements are enforced, it will be difficult for the public to
become fully aware of the underlying illegal conduct. Similarly, ar-
bitration clauses have helped mask the rampant sexual harassment
at the nationwide chain of jewelry stores, Jared and Kay Jewelers,
where, as one of the attorneys for the victims explained, “Most of
them [the victim employees] had no way of knowing that the others
had similar disputes, because that was all kept confidential.”4
      Arbitration agreements are also widespread in the consumer
context, and similarly, private arbitration may help conceal corpo-
rate wrongdoing in the consumer setting. For example, suppose
that Amazon.com was illegally selling controlled substances with-
out a prescription on its website.5 Because Amazon purports to
bind all its customers to arbitration, a consumer may not be able to
fully access the court system if he or she were harmed by Amazon’s
unlawful sale of controlled substances. In effect, it would be un-
likely that Amazon’s sales practice is challenged in a full court pro-
ceeding involving broad discovery tools and public filings that
could help shed light on corporate wrongdoing. Arbitration can
frustrate the ability to fully and publicly hold corporate wrongdo-
ers accountable.
      Millions of American employees and consumers are unable to
access the public court system because they are bound by arbitra-
tion clauses. As a result, private arbitration tribunals are resolving
virtually every type of claim that may arise in the consumer or em-
ployment context, such as civil rights, wage and overtime, con-
sumer protection, breach of contract, fraud, battery, and wrongful
death claims. If two conditions exist—namely, a) if there is mean-
ingful consent by both parties, and b) if fair procedures govern a
private arbitration tribunal—then arbitration can be an effective,
fast, cost-efficient method of resolving disputes and an appropriate
alternative to litigating in the public courts. However, these two
conditions are frequently lacking in the consumer and employment
settings. Consent is supposed to be the foundation for arbitration,
but meaningful consent to arbitrate is often missing in the con-

    3  Id.
    4  Yuki Noguchi, No Class Action: Supreme Court Weighs Whether Workers Must Face Arbi-
trations Alone, NPR MORN. ED. (Oct. 6, 2017), https://www.npr.org/2017/10/06/555862822/no-
class-action-supreme-court-weighs-whether-workers-must-face-arbitrations-alon.
     5 See, e.g., Nicosia v. Amazon.com, Inc., 834 F.3d 220 (2d Cir. 2016).

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 655

sumer and employment context.6 To make matters worse, some
corporate parties attempt to abuse the arbitration process by draft-
ing take-it-or-leave-it arbitration agreements with harsh, unfair,
one-sided arbitration procedures.
      These harsh arbitration clauses often tilt the playing field in
favor of corporate interests and against vulnerable consumers and
employees. By creating an arbitration tribunal with unfair proce-
dures, companies can abusively stack the deck in their favor and
make it more difficult for an employee or consumer to assert his or
her claim successfully in an arbitration tribunal. For example, in
the absence of an arbitration clause, a consumer or employee may
have several years to file a claim in a traditional public court.
Whereas, a harsh arbitration clause drafted by an overreaching em-
ployer, may require that the employee submit a claim to arbitration
within a drastically-reduced time frame, such as a few days or two
weeks following the alleged wrongdoing.7 Such a one-sided clause,
drafted by the stronger corporate party, disadvantages a consumer
or employee by creating a severely compressed and unrealistic time
period in which a consumer or employee must detect wrongdoing,
hire an attorney, collect evidence of the wrongdoing, and prepare
and file claims in arbitration. Harsh, one-sided terms in arbitration
can make it more challenging for vulnerable, weaker parties to
prove their claims and obtain justice. Some terms can be so harsh
that the arbitration clause may scare away parties from ever pursu-
ing their claims. Arbitration can be misused as a way to suppress
legitimate claims.
      As explained in more detail in this Article, there are several
other examples of oppressive terms that a stronger corporate party
can slip into the fine print of an arbitration clause in order to create
an unfair arbitration tribunal. Such abuse of arbitration is unfortu-
nate because when used properly, arbitration can provide an effec-
tive, fair alternative to the traditional courts. Instead of arbitration
serving as a good-faith, legitimate method of resolving disputes,
corporate parties using harsh arbitration clauses can hijack the ar-
bitration process and twist it into a tool used for claim suppression
and to obtain de facto immunity from wrongdoing.

    6 See, e.g., Consumer Fin. Prot. Bureau, Arbitration Study, Report to Congress, Pursuant to

Dodd-Frank Wall Street Reform and Consumer Protection Act, at § 1.4.2 (March 2015) (discuss-
ing evidence of lack of awareness and understanding of arbitration clauses).
    7 See, e.g., Hill v. Garda CL Nw., Inc., 308 P.3d 635, 636 (Wash. 2013) (explaining that the

employee’s arbitration clause shortened the statute of limitations to only fourteen days).

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656 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

     One would expect that the legal system would prohibit such
harsh, one-sided, unfair terms in arbitration agreements. Unfortu-
nately, the existing legal framework regarding arbitration is out-
dated, incoherent, and inconsistent. This framework fails to fix or
appropriately address the abuses or overreaching by stronger par-
ties. Currently, if an arbitration agreement contains harsh terms,
such as an abbreviated statute of limitations, some courts merely
sever the harsh terms from the agreement in an attempt to rescue
the rest of the heavy-handed, defectively-drafted arbitration clause.
The court then compels the parties to arbitrate pursuant to the ju-
dicially-redrafted agreement. Similarly, some courts allow corpo-
rate defendants to stipulate a waiver of certain harsh terms in an
arbitration agreement, after a dispute arises, and as a result of this
unilateral stipulation from a defendant company, the court severs
the harsh terms. Effectively, through the severance of harsh terms,
courts pretend that the company’s overreach and attempted abuse
of arbitration never occurred. However, mere severance of harsh
terms is highly problematic because it creates perverse incentives
for companies to continue drafting harsh terms. Also, some con-
sumers or employees may be daunted at the lengthy process of try-
ing to obtain a judicial order severing harsh terms, which is not
even a guaranteed result. In effect, a consumer or employee may
be stuck with the harsh terms. Or if an employee or consumer tries
to obtain a judicial order severing the harsh terms out of the arbi-
tration agreement, it may take months or years of litigation, which
is wasteful and inefficient. In sum, the current judicial solution of
severance of harsh terms undermines federal arbitration law, and
leads to several other problems identified in this Article.
     This Article presents a novel solution and develops a new legal
framework to cope with the problems of harsh, one-sided arbitra-
tion agreements. This Article proposes that the text, policy, and
history of the Federal Arbitration Act (“FAA”), the main federal
law governing arbitration, does not allow courts to sever harsh
terms from an arbitration agreement in order to resuscitate a de-
fective arbitration agreement. The core thesis of this Article is that
courts are required, as a matter of federal law, to invalidate the
entire arbitration agreement if the agreement contains any harsh
terms. As a result of this new approach requiring complete and
automatic invalidation, consumers and employees would then be
able to pursue their claims in the public court system with broader
procedural protections, where any part of the arbitration contract
is found to be unenforceable. In a nutshell, in connection with con-

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 657

sumer and employment disputes, courts should adopt a remedy of
complete invalidation of an arbitration agreement containing harsh
terms, as opposed to merely severing the harsh terms. Courts can
immediately implement this new framework, which is fully consis-
tent with the spirit, intent, and text of the FAA, and this proposal
will help regulate and promote a fairer use of arbitration for con-
sumers and employees.
     This Article is divided into three main sections. The first sec-
tion provides an overview of the FAA, and the second section ex-
plores how arbitration clauses with oppressive terms give rise to
multiple harms. The concluding section of the Article demon-
strates the many problems that arise from a court’s mere severance
of harsh terms, and discusses how the history, policy, and text of
the FAA require courts to adopt an invalidation approach. As a
result of the automatic and complete invalidation of the entire ar-
bitration agreement for containing a harsh term, a consumer or
employee, like the victims of sexual harassment at Jared Jewelers,
would be able to assert and litigate his or her claims in court, with
all the applicable due process and broad procedural protections
available in the court system.
     As explained in more detail below, courts have failed to ap-
preciate the structure and text of the FAA. They have failed to
recognize that the FAA embodies a simple, binary approach to the
enforcement of an arbitration agreement: either an agreement to
arbitrate is fully enforceable, or the agreement is not enforceable
at all. There is no middle ground in the FAA. Consequently, a
court does not have the ability to sever harsh terms from an arbi-
tration agreement resulting from a company’s unconscionable at-
tempt at overreaching.

II.       OVERVIEW OF ARBITRATION, THE FAA, AND                      THE    SUPREME
                  COURT’S EXPANSION OF THE FAA

     Arbitration is a dispute resolution process by which parties
agree to submit their disputes to binding resolution by a private
decision-maker. Arbitration has occurred across societies for cen-
turies,8 including in early America.9 However, the legal system in

      8
    DEREK ROEBUCK, ROMAN ARBITRATION (2004); DEREK ROEBUCK, ANCIENT GREEK AR-
BITRATION(2001).
  9 IMRE S. SZALAI, OUTSOURCING JUSTICE: THE RISE OF MODERN ARBITRATION LAWS IN

AMERICA (2013) (detailing the arbitration committee of the New York Chamber of Commerce);

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658 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

early America did not fully support or facilitate arbitration. Before
the 1920s, pre-dispute arbitration agreements were generally not
enforceable, and parties could back out of a promise to arbitrate at
any time before an arbitrator issued a decision.10 In pre-1920s
America, there was a general and well-established judicial hostility
against the enforcement of pre-dispute arbitration agreements.11
     During the 1920s, because of changes in American society, the
rise of progressive beliefs, the heavy lobbying of commercial inter-
ests, and many other factors, Congress and several states enacted
modern arbitration laws, which establish that pre-dispute arbitra-
tion agreements are generally binding.12 The main federal statute
enforced by the FAA declares written provisions in a contract “to
settle by arbitration a controversy thereafter arising out of such
contract” are “valid, irrevocable, and enforceable.”13 The FAA
provides a legal framework to facilitate the enforcement of arbitra-
tion agreements and the judicial confirmation of arbitration
awards.14 Members of the New York Chamber of Commerce were
the driving force behind the enactment of the FAA and similar
state statutes.15
     The FAA was originally limited in scope. The FAA, by its
very terms, only covers disputes arising out of a contract, and it was
originally intended to apply just to contractual disputes, such as
disputes regarding damaged goods, delivery dates, or the quality of
goods shipped in interstate commerce. Claims like personal injury
claims, civil rights claims, or other statutory claims were never in-
tended to be covered by the FAA because such claims do not de-
pend on or arise from a contract. Instead, the right to sue in these
scenarios arises from duties imposed by tort law or by various stat-
utes. For example, one’s right to sue to be free from bodily harm
or from unlawful discrimination is not dependent on, nor does it
arise from a contract, and instead arises from a state’s tort laws or

Carli N. Conklin, A Variety of State-Level Procedures, Practices, and Policies: Arbitration in
Early America, 2016 J. DISP. RESOL. 55 (2016).
   10 IAN R. MACNEIL, AMERICAN ARBITRATION LAW: REFORMATION, NATIONALIZATION, IN-

TERNATIONALIZATION, 19–20 (1992) (although laws existed supportive of arbitration once an
arbitrator issued an award, there was a “relative lack of enforceability of such agreements before
an award was made.”).
   11 See, e.g., Farmer v. Bd. of Trade of Kansas City, 78 Mo. App. 557, 566 (Mo. Ct. App. 1899)

(“It is well known that parties cannot by agreement to arbitrate future differences, oust the
courts of jurisdiction.”).
   12 See generally SZALAI, supra note 9.
   13 9 U.S.C. § 2 (2012).
   14 9 U.S.C. §§ 1–16 (2012).
   15 See generally SZALAI, supra note 9.

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statutes. When the FAA was enacted, and for several decades
thereafter until about the 1980s, it was viewed as limited in scope,
and courts would not have applied the FAA to statutory claims.16
     The FAA was also originally intended to apply to voluntary
contracts involving meaningful choice and consent. The FAA was
not intended to apply to “take-it-or-leave-it,” adhesionary, non-ne-
gotiable contracts. During Congressional hearings regarding the
FAA’s enactment, a Senator raised concerns about arbitration
agreements drafted by stronger corporate parties and presented on
a “take-it-or-leave-it” basis, such as non-negotiable form contracts
drafted by an insurance company or railroad company.17 During
the hearing, the Senator emphasized that such contracts are “not
really voluntary” contracts.18 One of the FAA’s drafters testified
and agreed with the Senator, explaining that the proposed bill was
not intended to apply to such “take-it-or-leave-it”, adhesionary
contracts.19 Instead, the FAA was designed to facilitate the resolu-
tion of contractual, commercial disputes between parties who
knowingly and voluntarily consented to arbitrate, which is fully
consistent with a waiver of Constitutional rights, such as the right
to a jury trial.20 Thus, when the FAA was enacted, it was not in-
tended to apply to non-negotiable, “take-it-or-leave-it” arbitration
clauses buried in long consumer or employment contracts.
     When the FAA was first enacted, it was widely understood
that it did not apply to employment relationships. The FAA, by its
terms, only applies to contracts involving interstate commerce,21
and at the time of the FAA’s enactment, the Commerce Clause of
the U.S. Constitution was construed narrowly such that most em-
ployment relationships were generally viewed as local in nature
and not triggering interstate commerce at all.22 However, there
was one exception or category of workers viewed as involved in

   16 See, e.g., Wilko v. Swan, 346 U.S. 427, 438 (1953); Am. Safety Equip. Corp. v. J. P.

Maguire & Co., 391 F.2d 821, 828 (2d Cir. 1968).
   17 A Bill Relating to Sales and Contracts to Sell in Interstate and Foreign Commerce and a

Bill to Make Valid and Enforceable Written Provisions or Agreements for Arbitration of Dis-
putes Arising out of Contracts, Maritime Transactions, or Commerce Among the States or Terri-
tories or With Foreign Nations, Hearings on S. 4213 and S. 4214 Before a Subcommittee of the
Senate Committee on the Judiciary, 67th Cong. 9-11 (1923) [hereinafter 1923 Congressional
Hearings].
   18 Id. at 9–10.
   19 Id. at 10.
   20 Cf. Wellness Int’l Network v. Sharif, 135 S. Ct. 1932, 1948 (2015) (explaining that waiver of

the right to Article III adjudication should be “knowing and voluntary”).
   21 9 U.S.C. § 1 (2012).
   22 Howard v. Illinois Cent. R.R., 207 U.S. 463 (1908).

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660 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

interstate commerce: transportation workers who crossed state
lines, such as railroad employees. Such workers were understood
to be involved in interstate commerce and potentially subject to a
statute like the FAA, covering interstate commerce. However, to
clarify and ensure that the FAA was never intended to cover any
employment relationships at all, the drafters added language to the
statute providing that the FAA does not apply to “contracts of em-
ployment” of any “class of workers engaged in interstate com-
merce.”23 Similarly, during Congressional hearings, one of the
FAA’s drafters emphasized that “[i]t was not the intention of this
bill to make an industrial arbitration in any sense. . . . It is not
intended that this shall be an act referring to labor disputes, at
all.”24 Furthermore, letters from the FAA’s drafters stressed that
“all industrial questions have been eliminated” from the FAA’s
coverage through Section 1’s exclusion of workers involved in in-
terstate commerce, and this exclusionary language was intended to
have the effect of “leav[ing] out labor disputes” from the coverage
of the act.25 Thus, at the time of the FAA’s enactment, and for
several decades thereafter, the FAA was read to not apply to em-
ployment relationships.
      The FAA, as originally enacted during the 1920s, had a narrow
scope. The FAA applied to commercial, contractual disputes aris-
ing out of a voluntary agreement involving meaningful consent.26
The FAA was generally not intended for widespread use in connec-
tion with “take-it-or-leave-it” consumer or employee contracts.
      Since the 1980s, the Supreme Court has radically transformed
and expanded the FAA’s reach, far beyond Congress’ original in-
tent. For example, in the 1980s, ignoring the clear text of section 2
of the FAA, which limits the FAA’s coverage to disputes arising
out of a contract, the Supreme Court held that by default, the FAA
covers all types of statutory claims—claims which do not arise out
of a contract.27 Again, in 1991 and 2001, in a shocking manner, the
Supreme Court in effect rewrote and expanded the FAA so that it

   23   9 U.S.C. § 1 (2012).
   24   1923 Congressional Hearings, supra note 17, at 9.
   25   SZALAI, supra note 9, at 135, 153.
   26  See, e.g., American Arbitration Association, YEARBOOK ON COMMERCIAL ARBITRATION
(1928) (demonstrating use of arbitration among trade associations and businesses for commer-
cial disputes).
   27  Shearson/Am. Exp., Inc. v. McMahon, 482 U.S. 220 (1987) (holding that the FAA covers
statutory securities law claims); Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473
U.S. 614 (1985) (holding that the FAA covers statutory antitrust claims).

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covers employment disputes.28 In more recent years, the Supreme
Court has applied the FAA to “take-it-or-leave-it” consumer
contracts.29
      The Supreme Court probably rewrote and expanded the FAA
beginning in the 1980s in order to advance a policy of docket-clear-
ing or perhaps partly in response to the growth of substantive
rights during the 1960s and 1970s.30 This judicial and unconstitu-
tional expansion of the FAA has triggered strong dissents from
some Justices. For example, Justice Sandra Day O’Connor strongly
criticized her colleagues for “abandon[ing] all pretense of ascer-
taining congressional intent with respect to the [FAA], building in-
stead, case by case, an edifice of its own creation.”31
      Today, as a result of the Supreme Court’s broad judicial ex-
pansion of the FAA, arbitration agreements routinely appear in
virtually all types of consumer and employment contracts. As a
result, millions of American consumers and employees have lost
the right to bring their claims in public courts with broad procedu-
ral protections. Also, the FAA was never designed or calibrated to
support and regulate such an expansive use of arbitration involving
consumers and employees. Furthermore, as explained below, more
recent developments in arbitration law since 2010 make arbitration
agreements virtually unassailable and with a strong presumption of
full-throttled enforceability. Herein lies the problem: in these
modern settings of consumer and employment relationships, and
because courts under governing law are strongly pre-disposed to
enforcing an arbitration agreement, there is a risk of abuse and
overreaching by the corporate party drafting the arbitration clause
in a non-negotiable, “take-it-or-leave-it” contract. A corporate
party may draft an unfair arbitration agreement with harsh terms
providing procedural advantages to the company. Unfortunately,
the FAA of the 1920s was never designed to address this particular
problem of a stronger corporate party including harsh terms in the

   28 Circuit City Stores, Inc. v. Adams, 532 U.S. 105 (2001); Gilmer v. Interstate/Johnson Lane

Corp., 500 U.S. 20, 35 (1991).
   29 See, e.g., AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 342–43 (2011).
   30 STEPHEN B. BURBANK & SEAN FARHANG, RIGHTS AND RETRENCHMENT: THE COUNTER-

REVOLUTION AGAINST FEDERAL LITIGATION (2017); Andrew M. Siegel, The Court Against the
Courts: Hostility to Litigation as an Organizing Theme in the Rehnquist Court’s Jurisprudence, 84
TEX. L. REV. 1097, 1139 (2006).
   31 Allied-Bruce Terminix Cos., Inc. v. Dobson, 513 U.S. 265, 283 (1995) (O’Connor, J., con-

curring); see also Perry v. Thomas, 482 U.S. 483, 493 (1987) (Stevens, J., dissenting) (“It is only in
the last few years that the Court has effectively rewritten the [FAA] to give it a pre-emptive
scope that Congress certainly did not intend.”).

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662 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

fine print of a non-negotiable consumer or employment arbitration
agreement. In fact, the FAA was never supposed to apply in the
consumer or employment context at all. To help fill in the gap, this
Article proposes a novel solution and new legal framework to han-
dle this problem of abusive, oppressive terms slipped into an arbi-
tration agreement in the consumer and employment contexts.

III.      THE HARMFUL EFFECTS OF AN ARBITRATION AGREEMENT
                       WITH HARSH TERMS

     To help highlight the harms associated with harsh arbitration
provisions, this section of the Article juxtaposes an example of a
simple, fair, and balanced arbitration agreement from the time of
the FAA’s enactment during the 1920s, with more recent, complex
arbitration agreements designed with one-sided terms that disad-
vantage claimants.

              A.      The Simple Arbitration Clause Recommended
                              by the FAA’s Drafters

     To provide some context in understanding the issues and
problems concerning arbitration agreements with harsh terms, it is
helpful to examine a simple arbitration clause from the time period
when the FAA was enacted. As explained above, the FAA was
enacted in 1925 and originally covered contract disputes between
merchants. Members of the New York Chamber of Commerce
played a critical role in the drafting, lobbying, and enactment of the
FAA and similar state arbitration statutes enacted during the
1920s.32 Around the time of the FAA’s enactment, the New York
Chamber of Commerce, which had extensive experience adminis-
tering commercial arbitration proceedings, recommended the use
of the following standard: a one-sentence arbitration clause for
contractual disputes. The prototypical type of dispute covered by
the FAA:
        Any and all controversies arising under, out of, or in connection
        with or relating to the agreement of which this is a part shall be
        submitted to arbitration, and judgment upon any award ren-

   32   See supra Section II.

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       dered may be entered in the highest court of the forum, state or
       federal, having jurisdiction in the premises.33
When parties, in good faith, enter into a simple, neutral, one-sen-
tence agreement to arbitrate contractual disputes, such as this
model agreement from the FAA’s drafters, the issue of severing
harsh terms will not arise. With such a minimalist agreement to
arbitrate, there are no harsh terms within this simple arbitration
clause for courts to evaluate and sever.
      Under the FAA, courts could easily and summarily enforce
such simple, one-sentence agreements to arbitrate, unless of course
there was some flaw in the “making of the agreement” that called
for its revocation, such as a defense of duress or fraud that attacked
the formation of the agreement to arbitrate.34 Notably, section 4 of
the FAA directs courts to examine the formation or “making of the
agreement,” and not the particular terms of the agreement, before
compelling arbitration.35 As a practical matter, the harshness or
fairness of particular terms within an arbitration agreement would
never become an issue with a simple, one-sentence promise to arbi-
trate similar to the model clause suggested by the FAA’s drafters.
If a problem existed concerning the “making” or formation of the
agreement to arbitrate, such as fraud or duress during the forma-
tion of the agreement, then a court, pursuant to the FAA, could
easily invalidate and refuse to enforce the arbitration agreement
altogether.36
      It is important to realize how the minimalist, one-sentence
agreement to arbitrate suggested by the FAA’s drafters would op-
erate in practice. Suppose that two merchants used this one-sen-
tence recommended clause in connection with the sale and delivery
of a large shipment of fruit. Through such a simple, balanced
agreement, the merchants are making a valid, binding, enforceable,
straightforward commitment to arbitrate future disputes regarding
their contract. Suppose a dispute arises in the future between the

   33 AMERICAN ARBITRATION ASSOCIATION, THE PRACTICE OF COMMERCIAL ARBITRATION

231 (1928). Of course, there are examples of longer, more detailed arbitration provisions from
the 1920s; see, e.g., Pollina v. State Mut. Rodded Fire Ins. Co. of Mich., 227 N.W. 765, 766 (Mich.
1929); Samuels v. Samis, 207 N.Y.S. 249, 251 (N.Y. Mun. Ct. 1924); Kohlsaat v. Main Island
Creek Coal Co., 112 S.E. 213, 214 (W. Va. 1922). However, the standard, recommended clause
from the arbitration committee of the New York Chamber of Commerce, whose members were
the driving force behind the drafting and enactment of the FAA, arguably represents a paradig-
matic example of the type of clause intended to be covered by the FAA.
   34 9 U.S.C. § 4 (2012).
   35 Id.
   36 Id.

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664 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

merchants, such as a dispute involving a late delivery, the delivery
of spoiled fruit, or the delivery of the wrong order, and the
merchants cannot resolve who is responsible for this problem. No-
tice that although there is an existing arbitration clause, there are
still open issues as to the details of the arbitration process itself.
Regarding these details of the arbitration process, such as the time
limit to file a complaint, the selection of an arbitrator or arbitra-
tors, the location of the arbitration proceeding, the giving of notice,
what information or documents must be exchanged between the
parties, as well as a myriad of other issues that can arise, the mini-
malist agreement provides no details. Instead, for such details, it
would be necessary for the parties to work together, after a dispute
arises between them, to fill in the gaps, perhaps by making a second
post-dispute agreement. There are different ways parties can fill in
these gaps after a dispute arises. For example, after a dispute
arises, the parties may select an arbitrator and perhaps a reputable
arbitration organization with developed, trusted, and fair procedu-
ral rules. For example, at the time of the FAA’s enactment, the
New York Chamber of Commerce already had years of extensive
arbitration experience, a list of experienced arbitrators, and a well-
developed set of simple rules for resolving commercial disputes
through arbitration.37 During the 1920s when the FAA was en-
acted, there were also several other similar organizations with de-
veloped arbitration rules and forms.38 After a dispute arises,
parties who have entered into a simple one-sentence agreement
could, post-dispute, agree to abide by the Chamber’s procedures or
the rules of another well-established, reputable organization. An-
other option would be for the parties to work together to develop
an ad hoc system of fair procedures after a dispute arises between
them. Additionally, if the parties desire, they could mutually select
a trusted, reputable arbitrator who could in turn take on the re-
sponsibility of filling in some or all of the gaps for the parties by
determining the procedures to be used in arbitration.
      With a simple, neutral one-sentence arbitration clause, such as
the standard clause suggested by the Chamber, harsh, one-sided
procedural rules are less likely to creep into the arbitration process
or fine print. After a dispute arises, the parties could mutually
adopt existing, fair, tested procedures of a well-established institu-
tion, develop their own procedures, or leave it to a reputable,

   37    See generally SZALAI, supra note 9.
   38    See, e.g., AMERICAN ARBITRATION ASSOCIATION, YEARBOOK ON COMMERCIAL ARBITRA-
TION    (1927).

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 665

trusted arbitrator to select fair procedures for resolving the dis-
pute. Against this backdrop, if one party proposes harsh terms or
harsh procedural rules after a dispute arises, then the other party
can likely protect itself by rejecting a harsh proposal and negotiat-
ing fairer, more neutral terms. If one party proposes harsh, unrea-
sonable arbitration terms after a dispute arises, or if an arbitration
institution had harsh procedures, there would be no obligation for
the other party to accept such harsh terms. After a dispute arises,
both parties should enter the arbitration process with their eyes
wide open before selecting an arbitrator or particular set of arbitra-
tion rules. In this setting of a simple, one-sentence arbitration
clause, it seems less likely that a party will be stuck arbitrating pur-
suant to harsh, unfair terms. After a dispute arises, the parties to a
simple arbitration clause should be more sensitive or more aware
of the potential harms of harsh procedures negatively impacting
the resolution of their existing dispute. In sum, with a straightfor-
ward, one-sentence agreement to arbitrate, the problems of abu-
sive, harsh terms should be less likely to exist, especially in the
context of two parties with relatively equal bargaining power.

B.      Complex, Modern Arbitration Agreements with Harsh Terms
          Cause Several Harms, Including Claim Suppression

     Current problems involving judicial severance of harsh terms
have arisen because arbitration clauses today can be much more
complex than the simple one-sentence agreement suggested by the
FAA’s drafters in the 1920s. Today, arbitration agreements can be
lengthier and more intricate.39 There is nothing inherently wrong
with including detailed procedural terms in a pre-dispute arbitra-
tion agreement, as opposed to dealing with those details after the
dispute has arisen. As long as the procedures are fair and mean-
ingful consent exists, it should not make a significant difference
whether detailed, fair procedures are adopted at the time the initial
agreement to arbitrate is made, or whether such procedures are
developed at a subsequent date after a dispute arises.

   39 See, e.g., American Express Cardmember Agreement, AMERICAN EXPRESS, https://www.am

ericanexpress.com/us/content/pdf/cardmember-agreements/green/American_Express_Green_
Card_12-31-2017.pdf (last visited June 1, 2018. The dispute resolution section of this
Cardmember Agreement drafted by American Express is more than sixteen hundred words. The
standard clause from the FAA’s drafters from the 1920s is about fifty words.

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666 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

     Unfortunately, problems arise when stronger parties take ad-
vantage of weaker parties by drafting complex arbitration agree-
ments with harsh or oppressive terms, especially when the weaker
party lacks bargaining power and is not aware of the existence or
significance of an arbitration agreement. When originally enacted,
the FAA was designed for contractual disputes between merchants
of roughly co-equal status.40 However, today, the setting for the
use of arbitration agreements is vastly different and much broader.
Arbitration agreements appear in connection with virtually every
type of consumer transaction or employment relationship.
Stronger corporate parties may present “take-it-or-leave-it” agree-
ments to consumers and employees who lack bargaining power,
and when such clauses contain harsh terms, the stronger party can
abuse the arbitration process to disadvantage the weaker party.
While the FAA was primarily designed for contractual disputes re-
garding interstate shipments of goods, much more is at stake with
the broader uses of arbitration today. With the judicial expansion
of arbitration, statutory claims designed to protect consumers or
employees, such as consumer protection statutes, civil rights stat-
utes, and wage statutes, are now covered by the FAA,41 and vulner-
able individuals can be potentially subject to lengthy arbitration
agreements with slanted, one-sided terms.
     The problem this Article seeks to address involves the
stronger parties that draft arbitration agreements on a “take-it-or-
leave-it” basis in the consumer or employment contexts, and where
the company or employer includes harsh, oppressive terms in the
arbitration clause in an attempt to tilt the playing field in its favor
and obtain procedural advantages, or worse. Sometimes, the terms
of the arbitration agreement may be so harsh that the agreement
has the effect of discouraging an injured consumer or employee
from ever asserting any claims. Arguably, when an arbitration
agreement contains oppressive terms, the stronger, drafting party is
not using arbitration as a genuine, good faith means to resolve dis-
putes. Instead, such clauses operate as a bad faith attempt to sup-
press the assertion of legitimate claims.
     To illustrate this problem of harsh, one-sided terms, consider
the following real-life examples of oppressive terms in arbitration
agreements involving consumers or employees:
        • Shortened statute of limitations:

   40   See generally SZALAI, supra note 9.
   41   See supra Section II (discussing the judicial expansion of the FAA since the 1980s).

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 667

            All legal claims have a certain time period or deadline within
            which they must be filed in court. However, some compa-
            nies use arbitration agreements to shorten the time period
            allowed by law, stating in the agreement that all claims must
            be submitted to arbitration within a shorter time period. For
            example, although governing law may allow for claims to be
            filed within two years, an arbitration clause may purport to
            require claims to be submitted within a few months or days
            of the alleged breach or wrongdoing.42
       •    Limitation on damages or remedies:
            Some companies draft their arbitration agreements to in-
            clude a limitation on the remedies or damages a consumer or
            employee may recover in arbitration.43
       •    Imposition of prohibitive costs or fees:
            Some arbitration agreements include terms requiring con-
            sumers or employees to pay prohibitive costs or fees associ-
            ated with arbitration.44
       •    Location:
            Some arbitration agreements require consumers or employ-
            ees to arbitrate in a distant, inconvenient location, far away
            from the consumer’s or employee’s place of residence.45
       •    Prospective waiver of rights:
            Some arbitration agreements contain choice-of-law provi-
            sions requiring arbitrators to apply the substantive laws of

   42 See, e.g., Bowman v. Raymours Furniture Co., No. L-1281-15, 2016 WL 5096353, at *3

(N.J. Super. Ct. App. Div. Sept. 20, 2016) (severing arbitration provision that required all claims
be submitted within 180 days after a claim arises; the governing statute of limitations for the
claim at issue was two years); Cox v. Station Casinos LLC, No. 2:14-cv-638-JCM-VCF, 2014 WL
3747605 (D. Nev. June 25, 2014) (employee’s arbitration clause shortened statute of limitations
to only sixty days); Letourneau v. FedEx Ground Package Sys., Inc., No. Civ. 03-530-B, 2004 WL
758231 (D.N.H. Apr. 7, 2004) (enforcing arbitration agreement that shortened statute of limita-
tions to only 90 days).
   43 See, e.g., Morrison v. Circuit City Stores, Inc., 317 F.3d 646 (6th Cir. 2003) (arbitration

terms that limited damages should not be enforceable and should be severed from the rest of the
arbitration agreement); Estate of Deresh ex rel. Schneider v. FS Tenant Pool III Tr., 95 So. 3d
296 (Fla. Dist. Ct. App. 2012) (severing punitive damages limitation in arbitration agreement).
   44 See, e.g., Spinetti v. Serv. Corp. Int’l, 324 F.3d 212 (3d Cir. 2003) (affirming district court

decision severing prohibitive cost terms in employment arbitration agreement); Irwin v. UBS
Painewebber, Inc., 324 F. Supp. 2d 1103 (C.D. Cal. 2004) (severing unconscionable fee provision
of arbitration agreement).
   45 See, e.g., DeOrnellas v. Aspen Square Mgmt., Inc., 295 F. Supp. 2d 753, 766 (E.D. Mich.

2003) (severing venue provision, which allowed employer to select location of arbitration hear-
ing, from the rest of the arbitration agreement); Van Voorhies v. Land/home Fin. Servs., No.
CV0950317135, 2010 WL 3961297 (Conn. Super. Ct. Sept. 3, 2010) (severing venue provision,
which required a Connecticut employee to participate in arbitration proceedings in California,
from the rest of the arbitration agreement).

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668 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

         another jurisdiction, to the exclusion of governing United
         States law.46
       • Limitation on discovery rights:
         In federal court, parties typically have broad rights to collect
         relevant evidence through depositions, interrogatories, and
         requests for production of documents. However, arbitration
         agreements may severely limit the ability of employees or
         consumers to use formal discovery tools.47
       • Confidentiality:
         Arbitration agreements may restrict the ability of the con-
         sumer or employee claimant to communicate with others
         about their dispute. Through a strict confidentiality clause,
         consumers or employees are unable to seek witnesses who
         may be willing to assist in the presentation of their claims,
         and others will be hindered from discovering the result or
         outcome of the arbitration proceeding.48
     Compared to the simple, balanced, one-sentence, model arbi-
tration clause from the 1920s, modern clauses containing harsh
terms do not provide a forum that is neutral and fair for both par-
ties. Modern clauses with these harsh terms are designed to favor
or provide an advantage for the stronger corporate party drafting
the clause.
     What makes the above terms unfair? One should keep in
mind that arbitration, when used legitimately, can be more desira-
ble than litigation and justified in part because arbitration has the
potential of being less complex than litigation. It is not reasonable
to expect that the procedural protections in arbitration would be
the same or as expansive as the broad procedural protections avail-
able in court. Among the potential benefits of arbitration are the
availability of streamlined procedures and the accompanying lower

    46 Salinas v. Carnival Corp., 785 F. Supp. 2d 1338 (S.D. Fla. 2011) (severing choice-of-law

provision foreclosing the application of United States law); Smith v. W. Sky Fin. LLC, 168 F.
Supp. 3d 778, 785 (E.D. Pa. 2016) (“The purpose of the arbitration agreement at issue here is not
to create a fair and efficient means of adjudicating Plaintiff’s claims, but to manufacture a paral-
lel universe in which state and federal law claims are avoided entirely.”); Bragg v. Linden Re-
search, Inc., 487 F. Supp. 2d 593, 601 (E.D. Pa. 2007) (arbitration agreement required consumer
to travel from Pennsylvania to California to arbitrate small dollar claims).
    47 Hulett v. Capitol Auto Grp., Inc., Civ. No. 07-6151-AA, 2007 WL 3232283 (D. Or. Oct. 29,

2007) (severing discovery limitations from employment arbitration agreement); Paduano v. Ex-
press Scripts, Inc., 55 F. Supp. 3d 400 (E.D.N.Y. 2014) (severing discovery limitations from arbi-
tration agreement).
    48 Larsen v. Citibank FSB, 871 F.3d 1295, 1320 (11th Cir. Sept. 26, 2017) (severing confiden-

tiality clause); Colvin v. NASDAQ OMX Grp., Inc., No. 15-CV-02078-EMC, 2015 WL 6735292
(N.D. Cal. Nov. 4, 2015) (severing confidentiality clause); see also Wemple, supra note 2 (quot-
ing the harsh confidentiality terms of Carlson’s arbitration clause with Fox).

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 669

process costs. Therefore, it is important to distinguish between
streamlined, neutral, legitimate procedures in arbitration that pri-
marily serve to lower process costs in a fair manner, and harsh pro-
cedures which tend to favor one party, without a significant
reduction in process costs.
      For example, consider an extremely abbreviated statute of lim-
itations in an arbitration clause, whereby a party has just a few
months or days to file a claim, instead of what would normally be a
default of a few years to file a claim in court. As a result of an
abbreviated statute of limitations, a party has a very limited
amount of time to discover the wrongdoing, interview and hire an
attorney, investigate a claim, and assert a claim before the arbitra-
tion tribunal. Having less time to file a claim in arbitration does
not modify or change the actual procedures used during the arbi-
tration proceeding itself. In other words, having less time to file a
claim in arbitration does not result in a reduction of arbitral proce-
dures compared to court procedures. If there is a given set of arbi-
tration rules, or a given set of court rules, whether a plaintiff has
three months or three years to file a claim will probably not result
in a meaningful reduction of process costs in either arbitration or
litigation. A legitimate benefit of arbitration is the reduction of
process costs, but an abbreviated statute of limitations in an arbi-
tration clause does not modify the procedures used in the arbitra-
tion itself. Abbreviated statutes of limitations can be viewed as a
one-sided attempt to benefit the stronger, drafting corporate party
and disadvantage a consumer or employee, making it more difficult
or less likely for them to be able to assert successful claims. Ab-
breviated statutes of limitations appear designed to discourage or
suppress the filing of claims and, in effect, tend to immunize a cor-
porate wrongdoer from liability, as opposed to contributing to a
good faith resolution of claims through simplified procedures in
arbitration.
      Similarly, a contractual limit on remedies or damages may not
significantly reduce process costs in arbitration compared to litiga-
tion. Whether an arbitrator is limited to awarding an employee a
certain amount of back pay may not significantly reduce the pro-
cess costs of arbitration. Although in some situations, a limit on
damages or remedies may possibly reduce the need of submitting
complex proof regarding certain damages, a limit on damages does
not seem to provide a significant reduction in process costs or arbi-
tral procedures. The damages limitation does not provide any sig-
nificant benefit to the injured consumer or employee. Instead, the

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670 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

primary beneficiary of a damage limitation or limitation on reme-
dies would be the corporate entity. Similarly, waiving the right to
bring a claim does not reduce process costs and solely serves the
interests of the corporate drafter.
     Harsh terms requiring consumers or employees to pay prohib-
itive fees they cannot afford, or requiring them to travel to distant
locations for an arbitration hearing, also do not significantly reduce
process costs in arbitration compared to litigation. These contrac-
tual restrictions in an arbitration agreement do not impact the pro-
cedures that are used in the arbitration proceeding; these terms do
not provide for more streamlined procedural protections compared
to those available in court. Instead, forcing a consumer or em-
ployee to pay exorbitant fees or forcing them to arbitrate in a dis-
tant location only serves to burden consumers and employees,
making access to the arbitral forum more challenging. Companies
using such harm terms are commandeering arbitration to deprive
consumers and employees of a fair tribunal and to suppress claims.
Through such harsh terms, like abbreviated statutes of limitations,
distant locations, and prohibitive fees, stronger corporate parties
are not using arbitration in a good faith way to resolve disputes
through reduced process costs in a streamlined arbitration.
     Another way of examining why these terms are harsh is to re-
alize these terms are not really integral to the arbitration process
and can stand alone and apart from an arbitration agreement. For
example, suppose that a company makes its customers or employ-
ees sign an agreement that all statutes of limitations are shortened
to six months and that damages can never surpass a limited thresh-
old. The intent behind such an agreement is to limit the ability of
the consumer or employee to file a claim and limit the plaintiff’s
damages, in any forum—court or arbitration. In other words, these
contractual terms are not specifically designed and focused on re-
ducing the process costs of an arbitration proceeding. The main
purpose of a severely abbreviated statute of limitations is to hinder
the ability of a consumer or employee to bring a claim, and severe
damage limitations discourage the filing of claims and make the
assertion of claims less attractive. This stand-alone nature of cer-
tain terms, like an abbreviated statute of limitations or damage
waivers, helps demonstrate that these contractual provisions have
very little to do with streamlining or reducing the process costs of

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 671

arbitration. In other words, such terms can be separated and inde-
pendent from the process of arbitration itself.49
     Discovery limitations, however, are different than the harsh
terms discussed above because discovery limits may help stream-
line and simplify the arbitral procedures for resolving disputes as
compared to court procedures, which typically allow for broad dis-
covery. Concerns about costs and delays associated with pre-hear-
ing discovery in court are common, and limited discovery in
arbitration is a procedural trade-off that parties make when choos-
ing to arbitrate. Discovery limits directly impact the procedures
for resolving a dispute and help simplify the procedures available
in court. However, at some point, as discovery limits become in-
creasingly more severe, they can go beyond merely reducing pro-
cess costs, and can become debilitating and significantly impact the
ability of an injured consumer or employee to prove his or her
claim. For example, consider a hypothetical, fact-intensive employ-
ment dispute where three supervisors in different locations are al-
legedly involved in wrongdoing, and there is no written record of
the wrongdoing. Further, suppose that the arbitration agreement
limits the employee to one deposition, or solely to the exchange of
documents that the disclosing party plans to use in support of its
own claim or its own defense. For this dispute involving three key
supervisors or coworkers involved in the wrongdoing, the arbitra-
tion agreement with such severe discovery limits may frustrate the
ability of the injured employee to establish his or her fact-intensive
claim. Although a discovery limit in arbitration may help reduce
process costs and the possibility of discovery fights to some degree,
severe limits on discovery can disproportionately favor the corpo-
rate defendants who drafted the arbitration clause, especially when
the evidence of fact-intensive wrongdoing is primarily in the hands
of the corporate defendant.

   49  The FAA is a sparse, relatively short statute. In fact, the statute never defines the term
arbitration, which has caused some tension in case law. Another way to frame the problem of
what to do with harsh terms is to view this problem as a definitional one: what counts as arbitra-
tion under the FAA? If one views arbitration as limited to a simple, one-sentence commitment
to arbitrate (such as “you and I agree to submit to the binding decision of an arbitrator”), and
nothing more, then additional, extraneous, harsh terms (such as a restricted statute of limitations
or confidentiality or harsh fee provisions) are beyond the scope of the FAA because such terms
are not an agreement to arbitrate. Perhaps one may argue that the FAA only requires a court
order compelling the parties to abide by a narrow, focused promise to arbitrate, and other terms
added to the narrow agreement to arbitrate can be considered as optional terms for the parties
to consider, but are not required to follow, in connection with the arbitration proceeding.

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672 CARDOZO J. OF CONFLICT RESOLUTION [Vol. 19:653

     Although discovery limits may be justified as a way to reduce
process costs and simplify the burdens associated with expansive
procedures available in court, it is harder to justify other terms,
such as abbreviated statutes of limitations; damage limitations; pro-
hibitive fees; inconvenient, distant locations; and waiver of rights as
providing a balanced, fair process for resolving disputes or as re-
ducing process costs for arbitration. These harsh terms tend to
favor and shield the corporate defendant who drafted the clause,
without providing a corresponding and significant benefit to an in-
jured employee or consumer. Instead of resolving disputes in a
more streamlined manner, these provisions appear to discourage or
suppress the filing of claims by tilting the playing field in favor of
the drafting company. With the exception of discovery limits, these
harsh terms are unlikely to simplify or streamline the arbitration
process itself.
     Another way to consider the harms of these harsh clauses is to
imagine two sets of arbitration rules: a) arbitration rules that copy,
verbatim as much as possible, the Federal Rules of Civil Procedure
(court-like, detailed arbitration rules); and b) very streamlined,
simple arbitration rules (minimalist arbitration rules). Suppose a
company includes a harsh statute of limitations in its arbitration
agreement, providing that an employee or consumer “only has
three months to assert a claim.” This abbreviated statute of limita-
tions would apply to both the court-like arbitration rules and mini-
malist arbitration rules, without changing the arbitration
proceeding. The abbreviated statute of limitations is not justified
as a way to reduce the process costs of arbitration. Similarly, a
damage waiver or limitation would not significantly impact either
type of arbitration proceeding. Also, harsh fee provisions forcing a
consumer or employee to pay a few thousand dollars per day will
not change or streamline either arbitration proceeding (although
the abbreviated procedures of the minimalist arbitration rules will
likely reduce the overall costs of arbitration). In other words, pro-
hibitive cost terms do not streamline arbitration or simplify the
procedures associated with a court proceeding. Similarly, requiring
a consumer or employee to arbitrate in a distant location would
apply equally to the court-like arbitration rules and minimalist ar-
bitration rules, without impacting or changing either set of rules.
Also, a provision in the arbitration clause waiving the right to pur-
sue certain claims would not change the nature of either the court-
like arbitration rules or minimalist arbitration rules. These terms

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2018] NEW LEGAL FRAMEWORK FOR ARBITRATION 673

do not operate to significantly streamline the arbitration process
itself.
      Another way to illustrate the harm from harsh arbitration
clauses is to consider a hypothetical case where an employer has
unlawfully engaged in racial discrimination against an employee in
violation of federal civil rights laws. If the employee files the civil
rights lawsuit in federal court, the employee would likely have sev-
eral years to file the claim and the benefit of the established proce-
dural rules governing federal court practice, which have generally
been in existence since 1938. These rules have been well-tested
and fine-tuned over time, and a rich body of case law exists show-
ing how these rules should be interpreted and applied. Also, these
judicial rules would give broad discovery rights to an injured victim
of racial discrimination.50 These broad discovery rights include the
right to interrogate several individuals and corporate representa-
tives under oath during a deposition, the right to inspect and copy
any relevant personnel files, emails, electronically stored informa-
tion, or other documents, the right to inspect any tangible evidence
that may be relevant to the case, and the right to propound written
questions. These broad discovery rights would enable the em-
ployee to collect evidence to prove his or her case in court. In
court, the employee would have these broad procedural rights and
protections to help prove his or her claim.
      Now consider the same claim in connection with a harsh arbi-
tration clause drafted by an employer desiring to discourage or
suppress the filing of claims. The employer may draft the arbitra-
tion clause to state that any arbitration proceedings must take
place in a distant location or to require that all claims must be as-
serted within an abbreviated time frame, such as a few months.
The employer may also add a clause limiting the remedies an arbi-
trator may award, such as monetary awards that are limited to
ninety days of back pay. To help cover up and prevent the discov-
ery of evidence of wrongdoing within the possession of the em-
ployer, the employer may draft the arbitration clause to ban all
discovery, except the exchange of a few documents each party
plans to rely on to support its own claims or defenses during the
arbitration hearing. A harsh arbitration clause may also state that
the plaintiff has to provide, in advance, a list of witnesses and docu-
ments or exhibits that he or she plans to use at any arbitration
hearing, but no reciprocal duty may be imposed on the defendant.
Through the combination of all these harsh terms—the distant and
   50   See, e.g., FED. R. CIV. P. 26–37.