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It also suggested that the company set up a mandatory arbitration system for employment claims to reduce the risks of court cases.
"Then they'd be in a position to say, 'Look, we did something to address some of the problem.' " But Mr. Hall suggested that the agency should take on "the entire litany of problems in this mandatory arbitration system," and not just the matter of class-action waivers.
He testified before a congressional subcommittee investigating the mandatory arbitration system.
He is the co-author of Mandatory Arbitration of Securities Disputes, A Statistical Analysis of How Claimants Fare, which examines the fairness of the mandatory arbitration system imposed on investors by the securities industry.
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The state bar association's report recommended scrapping mandatory arbitration in favor of a system that would provide arbitration, or mediation, only in cases where at least one side requested it.
It is nothing less than an indictment of the whole rotten system of mandatory arbitration of credit card disputes.
The arbitration stalemate broke when the sides agreed to a revamped arbitration system, with a new selection process for arbitrators, Perez said.
Instead, with this agreement, the Department appears to be moving in the opposite direction, acquiescing in ECMC forcing harmed students into arbitration, even though it plans to run its school system as a non-profit; few, if any, non-profit colleges currently use mandatory arbitration clauses.
"Remember how we used to mock the Soviet Union for having a civil justice system that was private?" said Cliff Palefsky, a San Francisco employment lawyer and foe of mandatory arbitration in the workplace.
But they overwhelmingly disapprove of specific components of mandatory arbitration.
"Corporations use mandatory arbitration to avoid liability," he said.
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