Recently, the #Airbnbwhileblack hashtag started floating around social media as a way to bring awareness to several reported instances of African Americans having issues with booking accommodations through Airbnb, a service that allows peer-to-peer short-term rentals of houses and apartments. Indeed, research has found that African-American users of Airbnb frequently encounter racial discrimination as they try to find a place to stay.
In March of 2015, Gregory Selden, who is African American, tried to book a room through Airbnb and his request was denied. Later, he tried to book the same room, on the same dates, but using two different profiles, both of which depicted white men. Those requests were accepted. The story became viral, and more and more users reported suffering similar treatment. Selden then sued Airbnb, claiming that Airbnb was violating the Civil Rights Act of 1964, which prohibits racial discrimination in public accommodations. He also sought to institute a class action on behalf of himself and others who were similarly situated.
However, the United States District Court for the District of Columbia sent the case to arbitration. The court, upon reviewing the case, noted that Selden (and other Airbnb users) agreed to submit all claims against Aribnb to private arbitration. This agreement stemmed from Selden (and other Airbnb users) clicking “yes” or “I agree” to the terms of service that are familiar to everyone who has signed up for an online account. By clicking “Agree” on the terms of service while signing up for Airbnb, Selden agreed to arbitrate all claims, waiving his right to a trial in a federal or state court.
The case will now proceed in arbitration. It is unlikely that the case will proceed as a class action lawsuit. The court understood that you cannot use Airbnb (or other online services) without agreeing to those terms, but that the law was clear:
“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 is clear that, unless the law changes, these agreements will continue to be enforceable. While arbitration can be a simpler, cheaper, and more efficient way to resolve disputes, that is not always the case and, in any event, the rules of arbitration can be very different than the rules of a court proceeding. Consumers should be aware of this, and the differences between court and arbitration, before they use Airbnb or any other similar services.