Arbitration and contracts : LUSENET : Lessig's Contracts : One Thread

I have a question that relates to what we did today in Contracts and Civil Procedure. Isn't that impressive? I'd ask it on the CivPro website, but that forum isn't quite getting the same activity. So here's the setup:

Not being terribly well-versed about Hollywood, I'll make a few assertions that I believe to be correct, and then treat them as fact.

1. If you want to write for Hollywood, whether it's for television, movies, or anything beyond pornography, you have to be a member of the Writers' Guild.

2. To be a member of the Writer's Guild, you have to sign the membership agreement.

3. The membership agreement obligates signatories to observe the dictates of an oppressive, unfair, solitary, poor, nasty, brutish and short arbitration board.

Given that the above three statements are true, and that our poor, starving writer needs to enter the only market for his specialized sequel-scripting skills (nice alliteration, eh?) or perish for lack of food, is his agreement to abide by the arbitration board's decrees made under duress?

Similar facts, different example:

A carload of tired, starving Oklahomans arrives at a farm in California on their last drop of gas, looking for work. The farmer, who has hundreds of these people working for him already, tells them that they can work if they sign an agreement, but otherwise they must move on. The agreement states that they will give up their legal right to a trial before a court of law regarding any problems that arise during their employment, instead submitting themselves to the jurisdiction of a kangaroo court made up of drunk Californians who play poker at the farmhouse on Friday nights. Since they really can't move on, they sign. Unspeakable acts ensue, each committed by a member of the management against one of these hapless Okies. The kangaroo court finds the defendants not guilty in each case brought before it, and levies fines against each plaintiff for bringing a frivolous lawsuit. The fines contribute to a mountain of debt, etc. etc. etc.

A sad story indeed. Do our heroes, those poor, downtrodden, hardworking Oklahomans, have any recourse?

Many thanks for any answers,


-- Anonymous, October 14, 1998


Okie remedy??

It seems to me that there was something in the court's opinion (or maybe it was later in the reading?) that listed what the court would look at in arbitration cases. They included three areas: 1) whether the parties agreed to submit to arbitration; 2) whether the procedures employed deprived the objecting party of a fair opportunity to be heard; and 3) whether the arbitrators exceeded their powers. I would think that the kangaroo court of drunken Californians could easily be found by a court to have deprived the Okies of a fair opportunity to be heard. It may also be possible to argue that the drunken Californians exceeded their powers by fining the Okies for frivolous claims.

It seems to me that even with arbitration agreements, the court would have a responsibility to determine whether the procedure is at least minimally fair and objective. I seriously doubt that the arbitration agreement in Paul's narrative would have specified that claims would be heard by drunken, poker-playing (not that there's anything wrong with playing poker!) Californians who were buddies with the farmer, so the claimants could probably also argue that the arbitrators violated the agreement.

I must say that I agree with Paul about the whole duress issue. It seems incredibly unfair to enforce a contract against a party that had no real choice in assenting to the contract, even though technically they did assent. On the other hand, I have trouble with the idea that the unknowing and unthreatening other party to the contract should get screwed because he relied on a contract that he had no reason to suspect was invalid. It seems like the basic choice here is who gets screwed -- the person who was threatened or the person who relied in good faith? There's no good answer.

-- Anonymous, October 15, 1998

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