If Passed, Employers Would be Banned From Forcing Workers into Secretive Arbitration Proceedings
WASHINGTON, D.C. – Fair Arbitration Now (FAN) applauds U.S. Reps. Jerrold Nadler (D-N.Y) and Bobby Scott (D-Va.) for introducing the Restoring Justice for Workers Act Tuesday, a bill that would restore access to justice for workers who have been harmed by their employer.
Forced arbitration clauses are ubiquitous in consumer and worker contracts. These fine-print terms require disputes to be resolved in private arbitration proceedings instead of in an open court in front of a neutral judge. In addition, the clauses often block individuals from banding together to resolve claims. The legislation was introduced in direct reaction to the U.S. Supreme Court’s recent decision in Epic Systems Corp. v. Lewis, which decided that employers can enforce forced arbitration clauses that prohibit workers from bringing class or collective actions.
In its letter of support for the bill, the FAN coalition said the bill, “correctly recognizes the fundamental rights and protections at stake. We strongly support this bill that would reinstate worker protections by eliminating forced arbitration clauses and class action bans in employment contracts, and would ensure that arbitration is truly voluntary, allowing all parties to choose court or arbitration after disputes arise.”
For workers, forced arbitration is not a viable alternative method to resolve disputes with their more powerful employers. Requiring individual arbitration proceedings fails to address widespread harm and misconduct that impacts a large group of workers, such as wage disputes, systemic discrimination and sexual harassment. Plus, forcing workers into individual arbitration can squash valid legal claims from ever going forward by sending them to a secretive process where complainants are required to act on their own, which can be too costly of an endeavor, particularly if the individual claim is relatively small.
The Restoring Justice for Workers Act would amend the Federal Arbitration Act (FAA) and the National Labor Relations Act (NLRA) to ensure that disputes between employers and workers can be resolved in court and ensure that workers can band together in class or collective actions. This bill is a necessary step to improve conditions in today’s employment market, FAN believes.
According to the Economic Policy Institute, more than 54 percent of nonunion private-sector employers use forced arbitration against their workers, impacting tens of millions of people.
“Through decisions on the Federal Arbitration Act going back thirty years, the Supreme Court has greatly limited the rights of consumers and workers to access the civil justice system. In the Restoring Justice for Workers Act, Congress is taking an important step to correct the Court’s incorrect interpretation of the federal law governing arbitration,” said Remington A. Gregg, counsel for Civil Justice and Consumer Rights at Public Citizen.
“It is long past time for Congress to revive access to justice for workers and consumers. We strongly support the Restoring Justice for Workers Act, and look forward to working with Rep. Nadler and other lawmakers to secure passage of this bill and others that would restore consumers’ and workers’ ability to go to court to seek remedies when harmed,” said Christine Hines, legislative director of National Association of Consumer Advocates.
“The Supreme Court’s Epic decision further stacked the deck in favor of big corporations by taking away workers’ rights to hold their employers accountable in court when they are mistreated, abused or discriminated against,” said American Association for Justice (AAJ) CEO Linda Lipsen. “This important bill would restore millions of workers’ fundamental rights to seek justice when corporations break the rules.”
“Workers should not have to give up their constitutional right of access to the courts just to get a paycheck,” said Lauren Saunders, associate director at the National Consumer Law Center.
The pervasive practice of hiding forced arbitration provisions in the fine print of consumer and worker contracts is owed to a series of closely decided U.S. Supreme Court decisions that have strengthened the Federal Arbitration Act’s power over other federal laws and the constitutional right to a civil jury trial. On Oct. 29, the Supreme Court heard two arbitration-related cases, one of which could continue to impact the rights of workers.
FAN is a network of more than 70 consumer, labor, legal and community organizations that support ending the practice of forced arbitration in consumer and non-bargaining employment contracts. FAN’s full letter of support can be found here. A full list of FAN members can be found here.