Why words matter in Nursing Home Contracts

If you were a Fox News fan in the early days (or just a general consumer of news and media) no doubt the name and face of Gretchen Carlson rings a bell. She was one of the network’s early stars – smart, attractive and often on screen discussing the difficult news of the day.

In 2016, she publicly revealed she had been sexually harassed and threatened by the station’s owner Roger Ailes for years during her employment. 

So what does Gretchen Carlson’s work place harassment have to do with Virginia Nursing Homes you may be asking? (And it’s a good question by the way). 

The answer is forced Arbitration. 

When Carlson signed her employment contract with Fox News she agreed that any allegations of discrimination, breaches of contract etc – would be handled in a super secret process called Arbitration and not in her local state or federal court system. 

The same language appears in almost every contract Virginia families are asked to sign with assisted living facilities, nursing homes, home health and other levels of retirement care. 

So what are these contractual provisions and why do they matter? 

  1. The provisions are typically one sided. If you refuse to pay your bill, or perform under the agreement – the Company keeps the right to sue you. But if they kill your Mom by neglecting her, allow her to fall from a Hoyer lift, choke on her meal, or develop a pressure ulcer – you are not allowed to sue.
  2. For a consumer (that’s you and me) to initiate arbitration it is often 5-10 times  more expensive than filing a lawsuit in your local court. And the companies love this – because the more expensive something is for the consumer, the less likely they are to pursue it. Why is it expensive? Because the judges in your County Courthouse are paid by tax dollars – and arbitration companies and Arbitrators (the fake judges*) are paid by the hour – by you and your client! So there is a big difference between $250 to file a suit in state court, and $5,000 to file in arbitration plus $200 an hour for the judges time.
  3. Arbitration is secret – which means, whatever bad thing the company did, you can’t talk about it or tell others. Further, if the company has resolved a hundred similar claims just like yours in Arbitration, you have no idea and can’t hold the company responsible for patterns of negligence. 
  4. Arbitration doesn’t have clear rules of exchanging information. In state and federal court – every party knows what information must be shared during a process called discovery. In arbitration – this is often undefined, limited or worse – so unclear the parties remain confused as to what information they are entitled on getting. 
  5. In arbitration – one person decides the fate of your case (sometimes 3 if a panel is agreed to – but that means you are paying three people to hear your case $$$$$ !)

THE ONLY and I mean ONLY benefit I see in sometimes arbitrating cases, is that the process can be quicker than a state or federal court process which usually takes a year or longer.

So why does the nursing home / Fox news or other large corporation include these in their written contracts? One simple reason – they benefit the company and not the consumer or employee. And big business knows this. Currently huge industries are lobbying congress to keep these provisions in contracts so that we the people no longer have direct access to our local court system.y hope (and I am an optimist) is that some Congress in my lifetime will have the guts to put people first again and end forced arbitration. 

The road is long – but not bleak to end forced arbitration.

A side note – in Virginia, even if you do sign one of these – all is not lost. The law allows you 60 days after the healthcare ends or the person’s personal representative qualifies in Court on the Estate to revoke the arbitration agreement. Virginia Code 8.01-581.12. Sadly, the same right to revocation does not exist in employment contracts or other consumer contracts – but at least it’s a start. 

If you are someone who cares about equality – about people have the same rights as big business – about someone who believes our justice system should be accessible to everyone – call your State and Federal representatives and complain about arbitration agreements. 

Lauren Ellerman

Lauren Ellerman

In 2011, Lauren Ellerman was named "Young Lawyer of the Year" by the Roanoke Bar Association for her work in the community. To speak with Lauren about your personal injury case, contact her at lellerman@frithlawfirm.com.