In the fall of 2011, Career Education Corporation (CECO) revealed that a significant number of its schools had cooked the books on the job placement rates they were disclosing to prospective students and regulators. Now investors in the giant for-profit higher education company are about to earn a nice profit for these misdeeds.
In 2013 a federal judge gave his preliminary approval to a $27.5 million settlement that the Career Education corporation (a for-profit swindler) had reached with shareholders to put an end to a lawsuit they brought accusing the company of deceiving them about its record of placing graduates into jobs. In contrast, most of the students who were the direct victims of this deception – with the exception of students from New York State who attended CECO’s campuses – are unlikely to receive any relief for these abuses. Instead, students who enrolled in these schools based on false promises will be stuck paying off loans they took out to pay for these programs for years.
What accounts for this disparity? The answer is that investors in for-profit colleges have access to the courts for filing their grievances, while most of the sector’s students do not.
Over the last several years, the for-profit higher education industry has succeeded – with the help of the U.S. Supreme Court – in stripping these students of their right to bring class action lawsuits against their schools. For-profit colleges have achieved this by including a clause in students’ enrollment agreements that requires them to settle any disputes with the schools through binding arbitration. By signing these documents (unbeknownst to them), students, often unwittingly, sign away their right to bring their cases to court and in front of a jury.
The courts hold out the promise of safeguarding everyone, regardless of wealth and power. But that fundamental promise of equal justice under law is facing a severe threat. Buried in everyday agreements for products, services, and jobs is fine print saying when you are harmed, you can’t go before an impartial jury or judge. Instead, these forced arbitration clauses (http://www.washingtonpost.com/business/supreme-court-backs-binding-arbitration-agreements/2012/01/16/gIQAg4LuGQ_story.html) send you to a decision-maker picked by the company that wronged you. Not surprisingly, one study found that arbitrators rule for companies over consumers 94 percent of the time. And you’re stuck with their decision because there’s no appeal. It’s a rigged system that helps companies evade responsibility for violating anti-discrimination, consumer protection, and public health laws.
Narrated by former U.S. Secretary of Labor Robert Reich, AFJ’s new short documentary Lost in the Fine Print tells the story of three everyday people who found themselves trapped in this system—and the impact of forced arbitration on their lives and livelihoods.
Lost in the Fine Print is a game-changer. It demystifies the concept of forced arbitration, and urges us to demand change. After the screening, we invite you to participate in a conversation about this critical issue and learn about how we can all stand up to reclaim core democratic principles.
Nan Aron, president, Alliance for Justice
Linda Lipsen, chief executive officer, The American Association for Justice
Julianna Forlano, host and creator, Pacifica Radio’s Julianna Forlano Show
Deepak Gupta, founding principal, Gupta Beck PLLC
Event LocationMarriott Marquis Hotel
901 Massachusetts Avenue NW
Washington, DC 5:30 pm Reception 6:00 pm Program