Progressives in the United States House of Representatives have re-introduced the FAIR Act, legislation intended to kill mandatory arbitration.
According to Common Dreams, the Forced Arbitration Injustice Repeal Act would prohibit companies from enforcing mandatory arbitration agreements.
In his bid to reintroduce the FAIR Act, Rep. Hank Johnson (D-GA) said ordinary people should not be disempowered by arbitration clauses—especially in the midst of the ongoing coronavirus pandemic.
“As the gap widens between the haves and the have nots, so too does the massive power differential between soulless corporations and individuals just trying to get by,” Johnson told MarketWatch.com. “People struggling to make ends meet during a global pandemic, now more than ever, need to retain the ability to hold them accountable through our judicial system.”
Mandatory arbitration agreements—which are often hidden inside use terms for different products and services—essentially strip consumers of their right to file a lawsuit for sustained damages. While arbitration agreements still allow individuals to take up claims with supposedly neutral mediators, the outcome of such sessions almost always favor corporate defendants.
That’s because arbitration tends to prohibit class-action-type maneuvers—an incredibly useful tool for consumers who have suffered individually small losses for common or recurring problems.
While class actions typically hold the promise of a small reward, they allow lower- and middle-class consumers to litigate against entities with far greater financial resources than any one of them may possess.
But in arbitration, the balance of power favors corporations—which can let proceedings drag on for years, forcing the plaintiffs to spend massive sums of money for little personal gain.
“Big businesses that already have all the power in the relationship regularly stack the deck to avoid the only thing out there that could hold them accountable—the United States justice system,” Johnson said.
Common Dreams notes that Rep. Johnson’s reintroduction of the FAIR Act was prompted by a group of Google employees who wanted to sue their employer in real courts, but were prevented from doing so due to mandatory arbitration clauses they were required to sign before hire.
Tanuja Gupta, a founding member of Googlers for Ending Forced Arbitration, told MarketWatch she believes today’s political climate may be more favorable to employee concerns.
“I really think we have a shot this year,” Gupta said. “This is one of those rare issues where the parties can get behind the same change even if for different reasons. And a little bipartisanship would go a long way right now.”
Gupta’s group further said that the COVID-19 crisis has emphasized the need for arbitration reform, since arbitration clauses have allowed “employers and nursing homes [to] evade accountability.”
Gupta and Googlers for Ending Forced Arbitration’s stance has been taken up by other consumer advocates, many of whom also said that the FAIR Act’s implementation is integral to keep companies accountable amidst the pandemic.
Paul Bland, executive director of Public Justice, told a House panel that the FAIR Act could herald sweeping benefits for Americans who’ve been forced to labor in unsafe or unsanitary conditions.
“The reintroduction of this bill is urgent in this moment,” Bland said, “during a pandemic in which countless employers are treating essential workers as sacrificial, and nursing home negligence has led to massive infection, the ability of ordinary people to hold corporations accountable through the civil justice system is a life or death issue.”
Sources
FAIR Act is being revived in Washington, raising hopes for end to forced arbitration
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