The United States is peculiar in its widespread enforcement of consumers’ and workers’ adhesive arbitration agreements. Comparative law discussions of arbitration often note this U.S. peculiarity, and this article confirms it by contrasting the law of Germany, the EU generally, the UK, and Japan.
However, this article points out, the U.S. is also unusual in the civil litigation to which arbitration is an alternative. Enforcement of adhesive arbitration agreements in the U.S. largely serves to override three other peculiarities of civil litigation in the U.S.: (1) the civil jury, (2) optout class actions, and (3) extensive discovery. Therefore, enforcing the arbitration agreements of U.S. consumers and workers generally moves their claims from the unusual procedure of U.S. courts to procedures closer to the global norm of comparable nations.
In addition, this article shows that the Federal Arbitration Act’s enforcement of adhesive arbitration agreements contrasts with federal cases holding that the Seventh Amendment jury right may be traded away in a bench trial (“jury waiver”) clause only by “knowing” consent. However, these “knowing consent” cases are inconsistent not only with the Supreme Court’s FAA cases but also with cases enforcing adhesive forum selection clauses trading away the Seventh Amendment right. And they are also inconsistent with cases enforcing adhesive consent-to-jurisdiction clauses and adhesive security agreements, both of which trade away constitutional Due Process rights. In sum, contract law standards of consent generally govern both Seventh Amendment and Due Process rights, while cases requiring “knowing” consent for bench trial (“jury waiver”) clauses are outliers.
Finally, U.S. states are free to require higher standards of consent to trade away jury and Due Process rights except where a preemptive federal statute says otherwise. The FAA is such a federal statute. In contrast, no analogous federal statute governs bench trial clauses, forum selection clauses, consent-to-jurisdiction clauses, or security agreements. This observation largely explains the case law on these five types of contract clauses.