WASHINGTON, D.C. — This week, Congressman Hank Johnson (GA-04), ranking member of the Judiciary Subcommittee on Courts, Intellectual Property and the Internet, and U.S. Senator Richard Blumenthal (D-CT), announced that they re-introduced the FAIR Act: The Forced Arbitration Injustice Repeal Act, re-establishing Americans’ 7th Amendment right to seek justice and accountability through the court system.
“NCLC strongly supports Senator Blumenthal and Congressman Johnson’s re-introduction of the FAIR Act to restore consumers’ constitutional right to their day in court,” said Shennan Kavanagh, senior attorney at the National Consumer Law Center. “Forced arbitration clauses in consumer financial contracts rob people of their right to an impartial judge and to a jury trial, and funnel consumers who have suffered financial loss caused by predatory businesses and illegal conduct into closed door, biased proceedings where they don’t stand a chance. The FAIR Act would stop the use of these fine-print barriers to access to justice.”
Rep. Johnson made the announcement in a speech from the House floor, and his bill has more than 80 cosponsors. Sen. Blumenthal introduced the Senate companion bill with 37 cosponsors. Watch Rep. Johnson’s floor speech HERE.
The bill passed the House of Representatives during the 116th and 117th Congresses. The FAIR Act – H.R. 2953 – would eliminate forced arbitration clauses in employment, consumer, and civil rights cases. Instead of forcing arbitration, the FAIR Act, and would allow consumers and workers to choose between arbitration and the Court system after a dispute occurs.
“Forced arbitration is an underhanded maneuver that corporations use to trick consumers, workers and small businesses out of their right to go to court and seek damages from a jury of their peers,” said Rep. Johnson. “You can’t get a cell phone or credit card or even a job nowadays unless you sign away your rights because that’s what every corporation requires. They force you into binding arbitration because it benefits them, and it’s at your expense. If this sounds unfair, it is. Big businesses that already had all the power in the relationship between itself and someone like you or me, stacked the deck so that they can avoid the only thing out there that could hold them accountable — the United States justice system.”
“Forced arbitration is unfair and un-American,” Sen. Blumenthal said. “Workers forced into a rigged arbitration system have lost one of the most powerful tools they have to hold employers accountable for gambling with their safety: access to justice. But workers aren’t the only ones at risk – nearly every American been stripped of their basic right to justice, whether they know it or not. One of the fundamental principles of our American democracy is that everyone gets their day in court. Forced arbitration deprives Americans of that basic right. The Forced Arbitration Injustice Repeal Act simply rights that basic wrong.”
BACKGROUND: Forced arbitration clauses restrict Americans’ access to justice by stripping consumers and workers of their right to go to court. Instead, consumers and workers are forced into an unfair arbitration system where corporations can write the rules; everything can be done in secret, without public rulings; discovery can be limited, making it hard for consumers to get the evidence they need to prove their case; and there’s no meaningful judicial review, so consumers and employees are often unable to appeal a decision even if the arbitrator gets it wrong. In 2015 investigative series, The New York Times documented the ills of forced arbitration clauses in consumer and employment contracts: Arbitration Everywhere, Stacking the Deck of Justice.
WHAT OTHER GROUPS ARE SAYING
“The FAIR Act’s ban on forced arbitration clauses in the corporate fine-print is urgently needed to restore critical legal protections, which would ensure consumers, workers, and small businesses can seek to hold corporate bad actors accountable in court for the harm they cause,” said Christine Hines, legislative director at the National Association of Consumer Advocates.
“Forced arbitration is a rigged game, one that repeat corporate players nearly always win,” said Lisa Gilbert, Executive Vice President of Public Citizen. “The FAIR Act would level the playing field and ensure that consumers and workers regain access to the courts when harmed by a company’s wrongdoing.”
“Today’s introduction of the FAIR Act is a critical step in the fight to undo the corporate distortion of our legal system. Corporate lawyers designed the system of forced arbitration to slam the courthouse doors closed on working people, ensuring that they have no plausible path to justice when wronged by corporations. Passing this legislation will re-open those doors and give every worker and consumer the chance to pursue the day in court to which they are entitled under our system of laws. We urge members of Congress to act swiftly to advance the FAIR Act and restore access to the justice system to Americans,” said Molly Coleman, Executive Director, People’s Parity Project.
“The FAIR Act restores the rights of patients, workers, and consumers to seek justice when a corporation breaks the law. Every American should be able to decide how to pursue accountability rather than having a corporation make the choice for them with forced arbitration,” said American Association for Justice CEO Linda Lipsen.