Brendan Ballou
When Companies Run the Courts: Forced Arbitration and America’s Secret Justice System
America has a hidden justice system. There, decisions are made in secret, and “judges” are paid for by the companies and abusers who are being sued. Victims usually lose. But when they do, they cannot appeal, and they cannot turn to real courts for help.
They are trapped in this system, and quite likely, so are you. You joined it when you accepted the Terms and Conditions on a website, opened a new credit card, or started a new job. When you did, you agreed to be trapped in this secret justice system called “forced arbitration.” Through its secrecy and corruption, forced arbitration helps companies cheat their workers, helps banks deceive their customers, and helps predators act with impunity. If companies and the very powerful often seem beyond the reach of the law, it’s because they are, and forced arbitration is the reason.
Yet despite the fact that forced arbitration profoundly shapes our lives, almost nothing has been written about it. Brendan Ballou’s When Companies Run the Courts changes that. It shows how forced arbitration came to be, how it makes your life worse, and how we might escape it.
Plunder: Private Equity’s Plan to Pillage America
Private equity surrounds us. Firms like Blackstone, Carlyle, and KKR are among the largest employers in America and hold assets that rival those of small countries. Yet few understand what these firms are or how they work.
In Plunder, Brendan Ballou explains how private equity has reshaped American business by raising prices, reducing quality, cutting jobs, and shifting resources from productive to unproductive parts of the economy. Ballou vividly illustrates how many private equity firms buy up retailers, medical practices, prison services, nursing-home chains, and mobile-home parks, among other businesses, using little of their own money to do it and avoiding debt and liability for their actions. Forced to take on huge debts and pay extractive fees, companies purchased by private equity firms are often left bankrupt, or shells of their former selves, with consequences to communities that long depended on them.
Perhaps most startling is Ballou’s insight into how this is happening with the active support of various arms of the government. But, as Ballou reveals in an agenda for reining in the industry, private equity can be stopped from wreaking further havoc.
Forced Arbitration Model Legislation
The most likely way we’re going to contain America’s secret justice system of forced arbitration will be in cities and states. Local governments can make forced arbitration more transparent and fair, and help consumers and workers escape forced arbitration by replicating California’s Private Attorneys General Act (PAGA) for a range of consumer and employer statutes. Here is draft model legislation, drawn from the PAGA statute and model legislation from numerous organizations, that you can implement in your city or state.
About Brendan
Brendan Ballou is the founder of the Public Integrity Project. He is a former federal prosecutor and served as special counsel for private equity in the Justice Department’s Antitrust Division. He is the author of Plunder: Private Equity’s Plan to Pillage America, which was named one of Fortune magazine’s best books of the year, and When Companies Run the Courts: Forced Arbitration and America’s Secret Justice System. His work has appeared in The New York Times, Politico, Slate, and The Atlantic.
