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Elizabeth and Robert Parker were married for nearly 59 years. When he got sick, she cared for him. But eventually his health declined so badly that Robert’s doctor told Elizabeth there was no choice but to put her husband in a nursing home. And so the broken-hearted wife signed the 23 pages of admission papers […]

Elizabeth and Robert Parker were married for nearly 59 years. When he got sick, she cared for him. But eventually his health declined so badly that Robert’s doctor told Elizabeth there was no choice but to put her husband in a nursing home.


And so the broken-hearted wife signed the 23 pages of admission papers to the Golden Age Nursing Home in Tomahawk, Wis.


Included in the 23 pages was a “mandatory arbitration” clause, whereby any dispute with the nursing home could not be taken to court, but had to be submitted to a private arbitrator. No one at the nursing home told Elizabeth what she had signed. Even if they had, it might never have registered, given her emotional state.


In December 2004, six months after he entered the nursing home, Robert Parker died. “The nursing home failed to secure him in his wheelchair,” explains Jeff Pitman, Elizabeth’s lawyer. “And Robert fell and broke his hip.”


It was a clear case of negligence, Pitman argues. Because Robert was not put in a special, secure wheelchair, he fell more than once, receiving injuries that caused great pain and hastened his death, family members claim.


But when Pitman took the case to circuit court, the judge ruled the mandatory arbitration clause was legal. That put the case back into arbitration, an uneven playing field where the nursing home had all the advantages.

For starters, there’s the cost. “We had to plunk down $15,000 before we could even get an arbitration hearing,” says Pitman.


And the legal restrictions. Under mandatory arbitration, the rules of evidence aren’t adhered to as strictly as in the courts. Discovery is limited. And unless the arbitration award is “arbitrary and capricious,” says Mark Thomsen, president of the Wisconsin Association for Justice, a state trial attorneys group, “you can’t appeal, not even if the arbitrators got the law wrong.”


Further stacking the deck, the mandatory arbitration clause usually spells out which arbitrators may be chosen. Typically, these arbitrators want to gain future cases and are inclined to see things from the company’s viewpoint. In fact, a 2007 Public Citizen report found that a California arbitration firm sided with the credit companies that hired it 94 percent of the time!


Mandatory arbitration is not a public hearing, which prevents a company’s dirty laundry from getting aired. There’s less bad publicity and less awareness of public policy issues that might incite legislative action. No state except California has made any attempt to make such cases public.

Small wonder so many companies have embraced this magic clause. Today, the use of binding arbitration is so prevalent that you can barely get a job, open a brokerage or credit card account, join an HMO, purchase cell phone service or find an assisted living facility for an elderly loved one without agreeing to such a clause.


One of Wisconsin’s most notorious practitioners is Menards, the home improvement chain based in Eau Claire, Wis., with 37,000 employees. “Big Money,” a May 2007 feature in this magazine, detailed horror stories of employees who felt they’d been wronged by mandatory arbitration. For two years, the story (posted at milwaukeemagazine.com) has generated similar comments from more employees.


The growth in mandatory arbitration began in 1991 after Congress reinforced the protections under Title VII of the Civil Rights Act, allowing employees to sue and collect punitive damages in cases of discrimination because of an individual’s race, age, sex, religion or national origin. Companies responded by insisting workers sign agreements to settle any future disputes through arbitration rather than the courts. Anyone who needs the job inevitably signs.


In recent years, senior living centers have begun to adopt mandatory arbitration. This creates some of the most egregious cases, says Thomsen, “because the family member is already emotionally distraught at having to place a loved one in long-term care. They’re extremely vulnerable and the nursing home has all the power.”


Ironically, the Wisconsin Supreme Court has ruled that mandatory arbitration cannot be included on car title loans, calling its use there “unconscionable.”


Pitman is appealing the circuit court’s ruling preventing Elizabeth Parker from suing the nursing home, but given the state Supreme Court’s current makeup, he’s not optimistic. “I think my best chance would be with the state legislature,” he adds, noting Democrats now control both houses.

To date, no state legislator has taken up the cause. But U.S. Sen. Russ Feingold (D-Wisconsin) has previously introduced the Arbitration Fairness Act of 2007 to make such agreements unenforceable. The bill failed to get out of committee, but with Democrats now in control of Congress, Feingold plans to reintroduce it.


“The rule of law means little if the only forum available to those who believe they have been wronged is an alternative unaccountable system,” he says.


Put more simply, every American deserves their day in court. To take that most basic of rights from a grieving widow seems all the more unconscionable.



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