Mandatory arbitration programs like Hooters' proliferated after the Supreme Court essentially endorsed the concept in 1991.
Your shareholder, partnership or operating agreement may require the parties to resolve the dispute through mandatory arbitration.
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That can be remedied by throwing out mandatory arbitration clauses, which have been cowing individual investors for decades.
The SEC has the authority to not only scrap the mandatory arbitration rule, it can impose fiduciary duty upon brokers.
In a suit in U.S. District Court in Ohio, a company buried its mandatory arbitration provision in an employee handbook.
Right now, if you have a broker dispute, you have to submit to mandatory arbitration run by the securities industry.
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But, considering how well the voluntary policies work, it would seem to make sense to replace mandatory arbitration with voluntary plans.
But mandatory arbitration handcuffs investors into signing away their rights to sue.
Go try to open a brokerage account on Wall Street as a public customer without agreeing to mandatory arbitration good luck.
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If investors gain and the securities industry looses as a result of mandatory arbitration, then why is the industry so adamant about it?
For years the securities industry has promoted and defended mandatory arbitration as being best for investors, as opposed to offering protection to the securities industry.
Called the Arbitration Fairness Act, it would end mandatory arbitration clauses.
It also announced a mandatory arbitration clause, forcing users to waive their rights to participate in a class action lawsuit except under very limited circumstances.
Most notably, a Supreme Court ruling last year strengthened companies' ability to use mandatory arbitration, a dispute-resolution process designed to keep consumer cases out of court.
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Many companies with mandatory arbitration plans are standing firm.
Reliance on self-regulation The commission is ever more willing to allow the brokerage industry to self-insure, self-adjudicate (through mandatory arbitration) and even control public access to the brokerage industry's criminal and disciplinary histories.
Another part to this initiative is mandatory arbitration: If management does not agree to a labor contract with a newly unionized unit after 120 days, an outside arbitrator can dictate the terms of the contract.
The White House's support of card check, which would do away with the secret ballot for union-organizing elections, and of forcing mandatory arbitration on companies that can't reach an agreement with their unions would artificially increase the cost of labor and hamper job creation.
This is especially true given that Section 921 of the Dodd-Frank Act provided the SEC with rulemaking authority to prohibit or impose conditions on the use of mandatory pre-dispute arbitration agreements.
The brokerage industry is unique in that it has been permitted to self-regulate with limited SEC oversight, self-insure through the Securities Investor Protection Corporation, self-adjudicate through mandatory NASD Dispute Resolution arbitration, and even control, through the NASD Public Disclosure Program, the information the public receives about firms.
Lawsuits are not fun and in industry arbitration, which is virtually mandatory, the deck is stacked against you.
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