Ban on Forced Arbitration Clears House Judiciary; Vote on House Floor Nears

WASHINGTON, D.C. – The U.S. House Judiciary Committee is expected to advance the Forced Arbitration Injustice Repeal Act (FAIR Act, H.R. 963) today, which would ban forced arbitration clauses in employment, consumer, antitrust, and civil rights disputes. The FAIR Act passed the U.S. House in 2019 and is expected to do so once again quickly. Remington A. Gregg, counsel for civil justice and consumer rights for Public Citizen, released the following statement:

“There may be no more blatant example of how giant corporations rig our economy than the take-it-or-leave-it, fine print arbitration clauses they insert into all manner of contracts that we sign. Today, in an important step forward, House Judiciary will advance the FAIR Act.

“In private arbitration, there is no judge or jury, and the right to appeal is severely limited. Arbitrators do not have to follow the law or precedent. They often have a strong incentive to keep the company that chose arbitration happy because it is a repeat customer. And proceedings take place behind a veil of secrecy – ensuring that regulators, civil society watchdogs, the media, and the public never learn about corporate crimes or widespread harm.

“It’s obvious why so many companies use forced arbitration clauses as get-out-of-jail free cards. Banks can overcharge consumers – or set up new accounts without their permission – and consumers have little redress. Survivors of sexual harassment or assault who are consigned to private arbitration are hindered from telling their truth. Workers denied overtime pay can’t join together to sue their employer.

“Corporate apologists for arbitration often say it is an alternative venue to obtain justice. But in practice, it just means cheated or abused consumers, workers, and small businesses are out of luck. We urge the full House to quickly pass the FAIR Act as quickly as possible.”