For immediate release: February 17, 2021
Washington, DC—NCL is pleased to support the Forced Arbitration Injustice Repeal Act (FAIR Act), a bill to re-establish Americans’ 7th Amendment right to seek justice and accountability through the court system. NCL applauds Representative Hank Johnson (D-GA) for introducing this critically important consumer and worker protection legislation as well as the Subcommittee on Antitrust, Commercial, and Administrative Law of the House Judiciary Committee for holding its February 11 hearing on the bill.
The bill previously passed the House of Representatives during the 116th Congress on Sept. 20, 2019 by a strong bipartisan vote of 225 to 186. The FAIR Act (H.R. 963) would eliminate forced arbitration clauses in employment, consumer, and civil rights cases and would allow consumers and workers to agree to arbitration after a dispute occurs. The House bill has 155 cosponsors.
This statement is attributable to NCL Executive Director Sally Greenberg:
Forced arbitration is a glaring marketplace injustice that undermines key worker and consumer protections. Thanks to a series of unfortunate Supreme Court decisions, forced arbitration clauses are ubiquitous throughout the marketplace. Thus, it falls to Congress to correct this injustice. Arbitration clauses are buried in the fine print of consumer and employment contracts for everything from cell phones, credit cards, cable service, nursing homes, employment, bank loans, student loans, apartment leases, and video subscriptions. Their practical effect is to block consumers’ and workers’ right to go to court. The actual arbitration process is fraught with problems; everything can be done in secret and without public rulings. Discovery is limited, and there is no meaningful judicial review, so consumers and employees are often unable to appeal a decision even if the arbitrator gets it wrong. Corporations can also choose where the arbitration will take place, what the rules will be, and how the costs will be borne.
Simply put, arbitration lacks the safeguards of a fair, impartial, and accessible court proceeding to protect people and hold accountable corporations that have committed widespread abuses, or marketed unsafe products or services.
As the late Justice Ruth Bader Ginsburg said about the Supreme Court’s rulings on forced arbitration, they ‘have predictably resulted in the deprivation of consumers’ rights to seek redress for losses, and turning the coin, they have insulated powerful economic interests from liability for violations of consumer protection laws.’
Congress never intended this. The Federal Arbitration Act was enacted in 1925 to give businesses — with relatively equal bargaining power — options for resolving their business disputes.
The FAIR Act would even the playing field. Contrary to industry arguments, it would not ‘ban’ arbitration; instead, it would stop forced arbitration from being imposed as a precondition for obtaining a product, or for obtaining or continuing service or employment, and closing off access to the courts for consumer law claims, employment law claims, civil rights claims, and antitrust claims by small businesses. Once a dispute actually arises and the stakes are clear, consumers, workers, or small businesses could freely choose arbitration, if they determine it to be a better option for them than the courts.
NCL encourages all members of Congress to support the FAIR Act; it is pro-worker, pro-consumer, and pro-small business legislation and helps to bring fairness to the marketplace and restore the basic American right to our day in court.
About the National Consumers League (NCL)
The National Consumers League, founded in 1899, is America’s pioneer consumer organization. Our mission is to protect and promote social and economic justice for consumers and workers in the United States and abroad. For more information, visit www.nclnet.org.