Call for end to corporations’ “rule by contract”

By Barry C. Lynn, Open Markets Institute:

In an article for The Atlantic titled “There’s More Than One Way to Fight a Monopoly,” Open Markets Institute Legal Director Sandeep Vaheesan and co-author Nathan Schneider lay out one way to restore power and true autonomy to people and small businesses. They argue that while efforts break up monopolies are important, it is also crucial for government enforcers and regulators to ensure that ordinary people and small businesses are “able to join forces and create unions and cooperatives that could hold the largest corporations in check.” Vaheesan and Schneider conclude, “Cooperation among small actors can remedy the yawning imbalance of power between corporate giants and everyone else.”

“Vaheesan also wrote an article in Current Affairs that calls for an end to corporations’ “rule by contract” over workers, consumers, and small businesses. In his article, Vaheesan criticizes the assumptions that undergird the rosy view of contracts as negotiated in “a realm of freedom and choice.” Besides the fact that workers and consumers simply do not have the time or resources to evaluate every term of every contract or agreement they enter into, they also must operate “against a background of deep inequality” with relatively large, powerful corporations. To restore peoples’ and small businesses’ rights, Vaheesan proposes that Congress ban specific abusive contract terms, like non-compete clauses, mandatory arbitration clauses, and class actions waivers, and also “grant a federal regulator the authority to identify and ban novel contracts of abuse through adjudication and rule making.”

Updated: September 8, 2019 — 9:38 am