By looking at this column readers agree to arbitrate everything

The U.S. Supreme Court in recent years has expanded the scope of arbitration way beyond what a Coolidge-era Congress could have envisioned or intended. For those of us who thought it couldn't get much worse for consumers and employees, the 11th U.S. Circuit Court of Appeals just decided to kick it up a notch, pushing the frenzy over arbitration into absurdity.

On Nov. 2, the 11th Circuit issued an opinion in Dye v. Tamko Building Products, Inc. [ruling attached below] regarding what it describes as a "shinglewrap" agreement. "Shinglewrap," you ask? What could that be? Well, those who are attuned to arbitratal jurisprudence may know the concept of a "shrinkwrap" agreement. This is an agreement where a purchaser agrees to certain terms of service, and potentially an arbitration agreement, by opening the cellophane or shinkwrap that encases a product. It can also be known as a "clipwrap" or "scrollwrap" agreement where the consumer purchases software or services online, and clicks to agree to the terms of service.

These types of agreements have generally been deemed acceptable, and the Supreme Court has enforced class action waivers in them. Since AT&T Mobility v. Concepcion in 2011, there has been a growing divide between disputes that are capable of class adjudication and those that are not. The "not" side seems to be growing day by day. Generally, the cases where consumers could be prohibited from bringing class actions involved circumstances where there was an ongoing relationship. Credit cards, cell phones, cable or satellite service and any service where there was a recurring monthly charge were class-waiver capable. Employment cases, despite some hope of missing the shoals, were dramatically dashed this summer in Epic Systems Corporation v. Lewis, which required employment disputes to be arbitrated one-on-one if a class waiver is present.

What was typically not class waiver or arbitration eligible were consumer transactions. Buying a pint of Ben & Jerry's or a bag of Doritos at Ralph's couldn't be arbitrated, let alone foreclosed from class litigation. Consumer suits where a product was purchased from a store seemed to be the last respite of class litigation in courts of law. The 11th Circuit just changed this.

The shinglewrap arbitration agreement that the court upheld in Dye was an agreement literally wrapped onto roofing shingles and could be read on the exterior of the package. The 11th circuit ruled that this type of placement on a consumer product is sufficient to create a legally binding contract with a class waiver and arbitration agreement. As ridiculous as this may sound, the case goes one step further. The consumer did not purchase the shingles; a roofer did, whom the consumer contracted with to install a new roof on his house. This, in the eyes of the 11th Circuit, was enough of a connection to create an agency relationship and bind the homeowner to the arbitration contact that he never saw. Let's pause for a second. In case you missed that, the homeowner is bound by an arbitration agreement with a class action waiver that he never saw, read or even knew about. This isn't "buyer beware." This is buyer, enjoy your crumbling roof.

Not that this idea hasn't been floating around for some time. In 2014, General Mills attempted to incorporate arbitration and class waiver language when consumers used it loyalty program, downloaded coupons, subscribed to email or entered sweepstakes. Facing a consumer backlash, the company walked back the proposed arbitration agreements. So, it is possible that the marketplace will react to consumer demands and move toward rejecting draconian agreements. But that won't happen with all products, especially ones that consumers don't directly purchase or even see. If anything, letting consumers be bound to arbitration by the purchasing decisions of their roofers, plumbers, and electricians, will encourage suppliers of products to those contractors to produce cheaper, shoddier goods and paste arbitration agreements onto their items, knowing that consumers can't band together to hold them accountable. (This appears to have happened in Dye, where the homeowners alleged that, after a few years, their shingles crumbled and sluffed off debris into their gutters.) It's one thing to waive your rights and another to have someone else do it to get a better price on a product they may or may not be passing on to you.

In some ways, this rapid expansion of arbitration may be a bridge too far and could be an issue that a newly invigorated Democratic leadership will use to political advantage. On Oct. 30, Rep. Jerrold Nadler, D-N.Y., and Rep. Bobby Scott, D-Va., introduced the Restoring Justice for Workers Act, H.R. 7109, that would reverse Epic Systems Corporation v. Lewis, a decision enforcing class waivers in employment arbitration agreements. Heartland voters may not be amused by the idea of forced arbitration and being required to arbitrate cases one by one against mega corporations. Having big companies that provide sub-par products take advantage of consumers who then have no real redress in the courts is something that most fair-minded people will see as unfair, unjust and not in conformity with our values as a society and the constitutional guarantee to a trial by a jury of one's peers.

This is an issue to be on the lookout for. The Democrats are going to push to change the Federal Arbitration Act significantly and the Senate and president are going to receive pressure from the Chamber of Commerce and other business groups to push back and maintain the status quo. It may not be in this Congress, but in the 2020s, I suspect arbitration will be scaled back considerably. You should also be on the lookout for random arbitration agreements on the side of your water bottle or favorite snack food. Arbitration may lurk everywhere, even in the places you least suspect.

The reader hereby acknowledges that any claims against the author of any kind or nature are subject to binding arbitration and not subject to any class, collective or group action. Just kidding. But not really.