Arbitration Clause Sinks Fiat Chrysler Employees’ Lemon Law Claims

When you work for a car company, there’s a certain amount of brand loyalty that goes along with the salary. Many auto manufacturers and dealerships encourage this, offering employees, friends, and family significant deals on the sale of new cars. But the arbitration clause in the fine print of Fiat Chrysler’s employee discount form means you could be signing away a successful lemon law claim if there are problems with the vehicle.

Employee Discounts Come with Strings Attached

Metro Detroit has a lot of residents working for the Big 3. Employees of Ford, GM, and Chrysler often count on their employee discounts as part of the perks of working for an auto manufacturer. These “friends and family” rates are often available for employees from the assembly line to the tech centers. And they can sometimes take thousands of dollars off the sticker price of the vehicle.

But for employees of Fiat Chrysler Automobiles, those employee discounts come with strings attached. The employee claim form that entitles you to a discount includes an arbitration clause. If the Jeep, Dodge, or Chrysler vehicle you buy turns out have manufacturing defects, this contract says you won’t be able to take those lemon law claims to court. Instead, you’ll have to take your claim to the National Center for Dispute Settlement (NCDS).

Paid Arbitration is Bad for Consumers with Lemon Law Cases

There is nothing inherently bad about alternative dispute resolution options like mediation or arbitration. When both sides are on an even playing field, arbitration can get the parties an answer to their legal dispute more quickly than going through the courts.

But that only works if both sides have equal stake in the game. When large corporations – like Fiat Chrysler – hire arbitration firms – like NCDS – to handle all their arbitration needs, it puts pressure on those supposedly neutral decision makers. If an arbitrator decides for the consumer too often, or decides the company needs to pay too much money, it could cost the arbitration firm one of its biggest contracts.

If a Fiat Chrysler employee’s car turns out to be a lemon and the matter gets sent to NCDS, there is less than a 10% chance they will win their case. That’s compared to over an 90% chance of winning a lemon law claim in state court. While Michigan lemon law and consumer protection laws shift attorney fees onto the manufacturer of a defective product, you may still be on the hook for arbitration fees even if you do win your case.

Arbitration Woes Extend Beyond Fiat Chrysler Employees

Chrysler car buyers don’t have to be friends and family of the company to get caught up in the arbitration trap. The Liblang Law Firm, PC, has represented several lemon law plaintiffs who were slipped an “employee claim form” by the dealer without their knowledge.

Fiat Chrysler isn’t the only company that uses NCDS for their arbitrations either. According to the Federal Trade Commission audit in 2015, the arbitration firm also handles cases for Acura, Honda, Lexus, Mitsubishi, Suzuki, Tesla, and Toyota. 

How to Avoid Arbitration Headaches and Protect Employees’ Lemon Law Claims

Just because you get a paycheck from Fiat Chrysler doesn’t mean you should lose your rights as a Michigan consumer. When it comes time to buy a new car, take advantage of your FCA friends and family discount. But when you are asked to sign an employee discount or employee claim form, take the time to read the fine print. 

Look for the paragraphs about mandatory arbitration or NCDS. Then cross them out and write “I do not agree to arbitration” above them, or in the margin. Initial the change and turn it back in. Many dealerships are more interested in making the sale than they are in fighting over an arbitration clause. But if you don’t take the time to cross it out, you could be signing away your right to file – and win – a lemon law claim in court.

Dani K. Liblang is a lemon law attorney at The Liblang Law Firm, PC, in Birmingham, Michigan. She represents consumers who purchase defective vehicles. Contact The Liblang Law Firm, PC, today for a consultation.