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February 9, 2008
Court rules against Amway Arbitration
By Truth in Amway
The Fifth Circuit US Court of Appeals has ruled against Amway/Quixtar in the Morrison case regarding the arbitration decision. From what I gather Morrison lost against Amway in arbitration (no surprise there) then objected to the arbitration when Amway went back to federal district court to get a judgement on the arbitration decision. The district court decided in Amway's favor, and Morrison appealed the ruling. The case ended up with the US Court of Appeals Fifth Circuit and the district courts ruling was reversed and the arbitration ruling was vacated.
The reversal of the decision seems to be mostly based off of the fact that the arbitration was invalid and unenforceable because Amway continued to reserve the right to modify or revoke the arbitration agreement at-will. So basically since Amway was not bound to the arbitration provision they could not enforce it on anyone else.
I have never been a fan of Amway's arbitration process since it always seemed like going to a card game with a stacked deck against you. From the way I understand it Amway trains the arbitrators, Amway could revoke or modify the arbitration provision at-will, and Amway hand-picks the arbitrators. Now I am no lawyer, but it seems to me if all of that is the way the Amway arbitration process works "fair" would not be the first word that would come to mind. So I must say I am happy with the decision and hope that it can possibly lead to a better process that is fair to all the parties involved.
You can read much more about the history of this case and view the actual documents at amquix.info website.