Lawmakers reintroduce Arbitration Fairness Act
by Carol Thompson
Yesterday U.S. Senator Al Franken (D-Minn) and Rep. Hank Johnson (D-Ga) reintroduced a bill Wednesday that would block companies and institutions from preemptively forcing employees, customers and others to arbitrate antitrust suits, civil rights claims and other disputes.
The Arbitration Fairness Act would eliminate mandatory arbitration clauses in employment, consumer, civil rights and antitrust cases, and would protect the right of everyday Americans to have their case heard in court, Franken said in a press release issued today.
“For years I’ve been fighting to re-open the courtroom doors to consumers, workers, and small businesses in Minnesota,” Sen. Franken said. “Our legislation, the Arbitration Fairness Act, is a commonsense reform to our justice system that will restore Americans’ right to challenge unfair practices by corporations and ensure meaningful legal recourse when everyday Minnesotans and small businesses are wronged. It’s clear that we’re at a point where big corporations can write their own rules and insulate themselves from liability for wrongdoing—this can’t continue,” he added.
Rep. Johnson noted there’s overwhelming evidence that forced arbitration creates an unaccountable system of winners and losers. “Unlike America’s civil justice system, which has evolved through centuries of jurisprudence and social progress, forced arbitration does not provide important procedural guarantees of fairness and due process that are the hallmarks of courts of law,” he said. “The practice often takes place behind closed doors, shrouding corporate misconduct in secrecy away from public scrutiny. Forced arbitration lacks both accountability and transparency by depriving the public opportunities to rigorously review errors and misconduct through judicial proceedings. Furthermore, courts have limited authority to vacate an arbitrator’s decision, which typically is final and binding, while arbitrators are not even required to have legal training or faithfully apply the law. The result is a runaway train that immunizes corporations from accountability, undermines the fabric of our laws, and harms consumers and workers.”
Sen. Patrick Leahy (D-Vt.), the top Democratic member on the Senate Judiciary Committee, also backed the legislation.
“Hardworking Americans should not be forced into arbitration as a condition to employment, for entering a contract with their cell phone company, or for any other reason. This is a basic matter of consumer rights and access to courts. The Arbitration Fairness Act would restore fairness for consumers and help ensure corporate accountability. It is long past time that Congress enact this important measure,” he said.
In 1925, Congress passed the Federal Arbitration Act (FAA). The legislative history of the FAA makes clear that Congress intended to target commercial arbitration agreements between two companies of generally comparable bargaining power. However, over the years the Supreme Court has slowly broadened the reach of the FAA, ignoring evidence that the FAA was never intended to apply to consumer or employment disputes or to supersede all other federal laws protecting consumers, workers and small businesses.
Highlight of the Arbitration Fairness Act of 2015 include:
- The Arbitration Fairness Act of 2015 reflects the FAA’s original intent by requiring that agreements to arbitrate employment, consumer, civil rights or anti-trust disputes be made after the dispute has arisen.
- This legislation would not prohibit arbitration, but insist that individuals have a meaningful choice at a time when they can understand that choice: after a dispute has arisen.
- This legislation would allow pre-dispute mandatory arbitration to continue in business-to-business agreements. This legislation would not apply to collective bargaining agreements.
- The Arbitration Fairness Act would restore traditional market principles to the arbitration industry: giving consumers a choice to arbitrate creates a market in which arbitration companies have to compete for their business, instead of simply catering to corporations. When the choice of arbitration is post-dispute-and therefore understandable and voluntary-arbitration companies must offer a fair process that both parties would choose willingly.
The complete bill can be found here.
Image: Flickr: Kjell Corshammar