Feb. 4, 2016

Legislation Is Welcome Step to Protect Consumers From Forced Arbitration

Statement of Sonia Gill, Counsel for Civil Justice and Consumer Protection, Public Citizen’s Congress Watch Division

Note: Today, the Restoring Statutory Rights Act was introduced by U.S. Sen. Patrick Leahy (D-Vt.), ranking member of the U.S. Senate Judiciary Committee. Public Citizen sent a letter (PDF) to members of the U.S. Senate urging them to support the bill, which would prevent forced arbitration of both federal and state constitutional and statutory claims.

Senator Leahy’s bill is a significant step to ensure that fine-print terms that have been hidden in contracts no longer block the courthouse doors to individuals in disputes over consumer protection, civil rights, anti-trust and other federal and state laws.

Forced arbitration has crept into virtually every sector of American life. Forced arbitration clauses force people to give up their legal rights in court before a dispute has arisen. Most people don’t know that forced arbitration clauses are buried in the fine print of contracts for employment, consumer products, financial goods and services, and student enrollment agreements.

The U.S. Supreme Court has repeatedly held that the Federal Arbitration Act (FAA) allows companies to impose forced arbitration on consumers and workers. As a result, many consumers and employees often are unable to have their day in court.

Sen. Leahy’s Restoring Statutory Rights Act would help bring the FAA back in line with its original intent. It would ensure that parties intended to be protected by established state and federal rights and remedies are not forced to give up those rights in the fine print of contracts. It also would reinstate state and federal courts’ ability to decide whether the forced arbitration provisions are enforceable under the laws of their own jurisdiction.

Senators should support this consumer and worker safeguard bill and help restore individuals’ access to court.

###