Beware of Arbitration Clauses in Nursing Home Contracts

Imagine you or someone you love got hurt or abused at a nursing home facility and you felt it was so outrageous you had to bring a lawsuit. You would want a jury of your peers to decide whether and how much the facility should compensate you for your loss.

However, you are at risk of signing away that important right.  A lower federal court in Arkansas has upheld a regulation permitting nursing homes to ask whether you would consent to arbitration instead of a jury trial. This request would be contained in the paperwork that residents or their families sign when admitted to the facility.

If you do consent, you will have waived your right to a jury, and a third-party arbitrator would decide your case instead. We usually recommend that you do not agree to that kind of clause. If you have already signed agreeing to arbitration, please consult us immediately. You have only thirty days to do so after signing, under current federal law.

Arbitration might be advisable, as it can hold down litigation costs and speed up the decision process. On the other hand, conflict of interest may be present. It may be hard to find an arbitrator whose employment doesn’t depend on his or her returning a corporation-friendly result. Other disadvantages are: arbitrators are not required to consider prior rules of law. Also, absent from unusual circumstances, there is no right to appeal the arbitrator’s decision. Moreover, given that you’re being asked to agree to arbitration before any dispute has even arisen, it can be difficult or impossible to tell whether arbitration would be a good choice in future circumstances.

Federal law now requires that facilities disclose arbitration provisions prominently in the paperwork, and residents must acknowledge that they have fully understood what they’re agreeing to. However, at stressful times like admission to a nursing home, most people are in no condition to grasp why they should not agree to arbitration of disputes that haven’t even happened yet. The resident may be in crisis or in an impaired condition and, additionally, the choice of nursing homes may be severely limited in the geographical area.

Moreover, the facility you’re dealing with may have chosen to risk being cut off from federal funds. In that case, they could exclude the federal safeguards and they could impose a “gag” non-disclosure agreement, behind which they can hide misconduct.

The case approving the arbitration rule is Northport Health Services of Arkansas, LLC, v. United States Dept. Health and Hum. Svcs., ___ F. Supp.3d ___, No. 5:19-CV-5168, 2020 WL 1696009 (D. W.D. Ark., April 7, 2020).

If you have signed a provision agreeing to arbitration, you can change your mind provided you consult us immediately. To get back your right to a trial by jury, you have only thirty calendar days to undo the signing. We look forward to hearing from you! Please contact our Brooklyn office or call us at (718) 875-2191.

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