House Votes to Ban Forced Arbitration; Would Stop Corporate Wrongdoers From Rigging the Justice System

Statement of Robert Weissman, President, Public Citizen

Note: Today, the U.S. House of Representatives is expected to pass the Forced Arbitration Injustice Repeal Act (FAIR Act, H.R. 1423).

There may be no more blatant example of how giant corporations rig our economy and political system than the take-it-or-leave-it, fine print language they insert into the consumer, employment and other contracts we enter into every day. Today, in a historic step forward, the House passed the FAIR Act, a measure that would end the tricks and traps that are endemic in form contracts, including those you enter by clicking “I agree” on the internet.

Hundreds of millions of contracts contain forced arbitration provisions and class-action waivers, denying consumers, workers and others the ability to file lawsuits in court and preventing them from joining with other similarly situated people to sue together.

Corporations use forced arbitration clauses in contracts as a get-out-of-jail free card. Banks can overcharge consumers – or set up new accounts without their permission, as Wells Fargo did – and consumers have no redress. Survivors of sexual harassment or assault are consigned to private arbitration, prevented 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, employees and others are out of luck.

Today, the House finally stated: No more.

We have no illusions about the challenge ahead. Preserving their forced arbitration get-out-of-jail-free card is a crucial priority of the U.S. Chamber of Commerce and big business. They are going to ratchet up their spending and lobbying, too. But the jig is up. People have caught on to big business’ schemes and aren’t willing to put up with them anymore. In the not-distant future, a mobilized public will overcome the Chamber and its ally, U.S. Senate Majority Leader Mitch McConnell (R-Ky.), and make the FAIR Act law.