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Forced Arbitration in Deal Memo

Arbitration Contract Deal Memo

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#1 Benjamin Verhulst

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Posted 28 April 2015 - 08:53 PM

Hey Everyone - 


Today I turned down a non-union job because of a particularly aggressive ‘Forced Arbitration’ clause in the deal memo contract I was asked to sign ahead of time.  


• Some quick info - 

‘Forced arbitration’ means that you waive your right to sue or take any claims to trial by judge or jury. Instead you have to take your claim to an ‘independent arbitrator’ who will decide once and for all what the outcome will be. If you don’t like the outcome, too bad, you have no other recourse.


• Here’s what that could mean for us - 

Let’s say you’re in an accident on set and you have to sue to pay for medical care, lost earnings, pain & suffering, etc. Instead of suing, you’re forced to go into arbitration with an arbitrator who has been approved by the Production Company you’re filing a claim against. Instead of a judge or jury, they’ll decide how much (if anything) you should get. If they deny your claim, too bad, there’s nowhere else to turn to.


This deal memo was with a big company and the producers said they were not allowed to change any language. Same line as always - ‘everyone is signing this: if you won’t sign, you can’t work.’


So everyone, thoughts? I turned this one down because it was particularly bad, but we sign things like this all the time. I don’t think you have to worry about it on union jobs because the basic contract covers it and the union will, hopefully, have your back.


Has anyone one else challenged this and succeeded?


A little more background info - http://tinyurl.com/pnulpnr


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#2 Robert Starling SOC

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Posted 29 April 2015 - 06:02 PM

If you are injured on the job you and the employer would be subject to Workers Compensation rules, processes and guidelines.



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#3 Alan Rencher

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Posted 29 April 2015 - 09:03 PM

Robert is right. You can't sign away your rights. I would be more worried about financial losses.
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#4 Benjamin Verhulst

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Posted 29 April 2015 - 10:07 PM

Sorry, the medical example was a bad one - you are correct Robert, that would go through Workers Compensation. I'll gladly eat my words after following up on that.

However, it is still true that you are signing away your right to access a court for any legal dispute with your employer under these arbitration clauses and that can be a very dangerous thing.


So is it the consensus that this is just the cost of doing business nowadays? I only balked at this one because it was particularly aggressive and decided not to sign after consulting with a lawyer on the language.


Some more light reading for anyone that might be interested - 



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#5 Janice Arthur

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Posted 30 April 2015 - 05:22 PM


Additional personal insurance for potential bodily injury worries you have and/or loss of income insurance may alleviate your worries some and may also be the way our jobs are changing I don't know.

Luckily these injuries and bad things are rare and since we can't reject their deal memo (as you said) this may be the only way to take the work. The guy who did take the job signed, did the work, and has spent the paycheck while you're worrying about it.

I'm constantly faced w these deals when I rent a car, buy software on-line etc. it's click agree or you are stuck w no car or software so it comes up often in today's world I'm not sure how to suggest you proceed.

Arbitration usually just keeps both sides from racking up lawyer bills and a long process.

Lord knows I've been wrong in the past so maybe I missed something but I wish you good luck in your dilemma.

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#6 Benjamin Verhulst

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Posted 02 May 2015 - 06:17 PM

That's a good idea Janice - things like Umbrella Insurance are always good to have.


Re: Other Deals - You can opt out of these clauses with a lot of major companies by going to their websites (Time Warner, for instance). That being said, you're correct in that you're oftentimes left with the choice of signing or walking away.


I don't think arbitration is necessarily a bad thing (especially when it's voluntary). However, when the language is such that the arbitrator is chosen by the company you have a grievance against AND there is no recourse if the process goes south (Binding Arbitration), then you could have a real problem. Also, a lot of the arguments that arbitration is cheaper and faster are dubious at best - you usually need the same lawyers that you'd need if you went to court, and arbitration has been known to drag out for years in some cases. But yes, it's rare, hopefully none of us will be in a situation to go through these processes anytime in our careers. I'm lucky enough that I've been able to pick and choose my jobs lately, so that made this decision easier.


Sometimes you just have to go on a rant for a minute :)

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