In a series of speeches on the House floor last Thursday, a group of House Members led by Rep. Hank Johnson made a powerful and compelling case to end the insidious practice of pre-dispute forced arbitration. Attacking forced arbitration in all its forms, the Members explained how corporations use the practice to deceive individuals into giving up their legal rights and to escape accountability for breaking the law. They also highlighted the growing demand for change and various ongoing reform efforts, including new legislation and agency rulemaking.
Rep. Joe Kennedy III described forced arbitration as “a manipulation of the justice system that tips our scales in the direction of influence, money, and power.” Rep. Sheila Jackson Lee lamented that “it can be nearly impossible to appeal” arbitrators’ decisions, which just compounds the unfairness inherent in each proceeding. Simply put, arbitration lacks the basic procedures and protections of our justice system and allows corporations to escape accountability for wrongdoing.
The speeches capped a week where momentum for congressional action was on full display, demonstrated by the introduction of new legislation and support for Equal Pay Day. Rep. David Cicilline announced on the floor that he will introduce targeted legislation protecting veterans and servicemembers from losing their rights in forced arbitration. Rep. Johnson also introduced the House version of the Restoring Statutory Rights and Interests of the States Act earlier last week, which would “allow individuals and small business to vindicate fundamental legal rights and remedies in court.” To celebrate Equal Pay Day last week, nine female senators joined the Senate’s version as co-sponsors. The Arbitration Fairness Act, introduced in both houses at the beginning of this Congress, would restore the fundamental rights of individuals by prohibiting pre-dispute forced arbitration clauses in employee, consumer, civil rights, and antitrust disputes.
The members also highlighted efforts by the Obama administration to end forced arbitration with agency rulemaking. Next month, the Consumer Financial Protection Bureau is expected to announce a rule prohibiting class action waivers in consumer financial product contracts. The rule would be a significant victory for consumers, allowing individuals to band together in class actions to hold businesses accountable for their wrongdoing. The Department of Education and Centers for Medicare & Medicaid Services are also considering rules that would deny funding to colleges and nursing home facilities, respectively, if they use forced arbitration clauses to strip students and those in need of long-term care of their Seventh Amendment right to a jury trial.
Rep. Johnson ended his remarks by stating that “Tides are turning. Americans are beginning to fight to restore their right to a jury trial.” Those that spoke out on the House floor have heard the American people. Their colleagues in Congress must join them in protecting Americans’ fundamental rights by ending forced arbitration.