Federal Judge Upholds Airbnb Arbitration Clause in Racial Bias Case

By | November 2, 2016

A man who claims that the online lodging site Airbnb violated his civil rights must take his complaint to arbitration with Airbnb and cannot sue the online service, a federal judge has ruled.

In a Nov. 1 ruling, Judge Christopher Cooper of the U.S. District Court for the District of Columbia upheld the arbitration clause in Airbnb’s terms of service. He found that Airbnb’s mobile sign-up screen adequately places users on notice of Airbnb’s terms of service including arbitration, and that users agree to those terms by clicking the sign-up box and using the service.

The ruling came in the case of an African-American man, Gregory Selden, from Virginia who was suing Airbnb because he claims a property owner refused to rent space to him because of his race. Selden cited Title II of the Civil Rights Act of 1964 that bars discrimination in public accommodations.

The case was an attempt to create a class action against Airbnb.

The judge said it may not seem fair to some but it’s the law, writing:

“No matter one’s opinion of the widespread and controversial practice of requiring consumers to relinquish their fundamental right to a jury trial—and to forego class actions—as a condition of simply participating in today’s digital economy, the applicable law is clear: Mutual arbitration provisions in electronic contracts—so long as their existence is made reasonably known to consumers—are enforceable, in commercial disputes and discrimination cases alike. ”

The judge said that since the arbitration clause applies to all disputes, it thus applies to claims of unlawful race discrimination that may arise out of or relate to use of the Airbnb service.

He rejected arguments that that federal civil rights claims are not subject to arbitration and that the Airbnb arbitration clause is unconscionable.

Judge Christopher said the court is not the proper place for objections to mandatory arbitration clauses in online adhesion contracts. “Such objections should be taken up with the appropriate regulators or with Congress,” the judge wrote.

“Federal policy dictates that doubts about the applicability of an arbitration agreement should be resolved in favor of arbitration,” he wrote.

Judge Cooper, an African-American, was nominated for his position on the court by President Obama in 2013 and confirmed by the U.S. Senate in March, 2014.

Selden’s Experience

Airbnb allows property owners or their representatives known as “hosts” to list their properties on its site, where users then attempt to book them. While Airbnb facilitates the transactions, the hosts decide to whom they will offer their homes for short-term stays.

In March, 2015, Selden and a friend used Airbnb to try to book accommodations for a trip to Philadelphia. Selden signed up on Airbnb and created a profile. To do so he had to click a sign-up button with this language: “By signing up, I agree to Airbnb’s Terms of Service, Privacy Policy, Guest Refund Policy, and Host Guarantee Terms.” The text included links to the various terms and agreements—17 pages worth.

The “Dispute Resolution” clause, by which Airbnb seeks to compel arbitration, appeared on page 15 of the document and stated in part: “You and Airbnb agree that any dispute, claim or controversy arising out of or relating to these Terms or the breach, termination, enforcement, interpretation or validity thereof, or to the use of the Services or use of the Site or Application (collectively, “Disputes”) will be settled by binding arbitration…”

Selden included a photograph of his face in his profile, along with his name, age and education. Shortly after creating his account, he inquired with a host about the availability of a listing but, according to Selden, the host told him that the accommodation was not available. However, while browsing Airbnb later that day, Selden found that the listing was still posted.

Suspecting that he was denied accommodations due to his race, Selden created two fake Airbnb accounts with photos of white men. He then used those accounts to apply to the same listing, and, he claims, the host accepted both. Selden later took to social media with his claims of discrimination and his posting quickly went viral.


Topics Legislation Claims Sharing Economy

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