The House passed a landmark bill that moves millions of U.S. consumers and employees a lot closer to having their legal rights restored.
On Sept. 20, U.S. representatives passed the Forced Arbitration Injustice Repeal (FAIR) Act with a 225-186 vote. If the bill clears the Senate, it will bar companies from requiring workers and consumers to relinquish their right to sue as a condition of employment or buying a product or service.
Currently, companies can slip arbitration agreements into the fine print of employee contracts and user agreements. These clauses effectively strip individuals of their right to sue their employer in court, even in cases of alleged sexual harassment, discrimination, civil rights violations, wage theft, and just about everything else that would form the basis of a legal dispute.
Instead of going to court, complainants are forced into arbitration – a private, out-of-court dispute system that is undeniably stacked in favor of the company. In this system, consumers and employees take their complaints to an arbitrator or panel of arbitrators who decide the outcome for the dispute. In many cases, those arbitrators are hired by the company and lack objectivity. Options to appeal an unfair ruling are generally poor.
A recent study found that 81 of the largest 100 companies in the U.S. include mandatory arbitration agreements in customer agreements. Another study found that some 60 million U.S. workers are barred from taking their employers to court by arbitration agreements.
“These provisions amount to a get-out-of-jail-free card for corporations that rip off, defraud, injure, cheat, racially and sexually discriminate against, create and tolerate hostile work environments for, and violate the privacy of their consumers, workers, students, nursing home residents and others,” said Robert Weissman of the advocacy group Public Citizen.
Indeed, the outcome for consumers has been dismal as more and more companies force arbitration. The Economic Policy Institute analyzed the outcome of arbitration cases and found that just 9% of them resulted in monetary relief for the consumers.
The FAIR Act’s passage still faces an uphill battle in the Republican-led Senate, but there are some promising signs that pro-arbitration legislators are opening to reform. Two House Republicans crossed the aisle and voted to pass the FAIR Act and some Senators, including Lindsey Graham (R-SC) have expressed a new willingness to take another look at mandatory arbitration.
“I believe arbitration has a place in society. I want to be pro-business, but everything that’s good for business may not be the best answer for society,” Sen. Graham, chairman of the Senate Judiciary Committee, said in a previous hearing on the FAIR Act. “In 2019, I want to look long and hard on how the system works; are there any changes we can make?”
Additional Source: Vox