Report documents how forced arbitration undermines laws against discrimination and consumer fraud; Senate to hold hearing on issue tomorrow
The full report is available at: http://bit.ly/190es31
WASHINGTON, D.C., DECEMBER 16, 2013: Civil rights and consumer protection laws are being undermined by Supreme Court decisions allowing big business to compel consumers to use a stacked-deck system of forced arbitration to settle disputes, according to a report released today by Alliance for Justice. The report was released on the eve of a Senate Judiciary Committee hearing on the issue.
“The rights protected by some of our most treasured statutes hang in the balance,” said AFJ President Nan Aron. “The Civil Rights Act, the Equal Pay Act and the Age Discrimination in Employment Act are just three of the landmark laws placed at risk when powerful corporations and employers can effectively opt out of them by forcing consumers and employees into arbitration.
“Forced arbitration has turned dispute resolution into a privatized system of dispute suppression that is supplanting our public court system and letting corporations ignore the laws that protect consumers and workers.”
AFJ’s report documents case after case of everyday Americans denied their rights because of forced arbitration. The report calls on Congress to pass the Arbitration Fairness Act to restore these rights.
Forced arbitration clauses are increasingly common in the fine print of consumer contracts, ranging from cell phone contracts to Internet-based services like Instagram and StubHub. Under forced arbitration clauses, consumers who buy defective products or are overcharged for a service are barred from taking their cases to court. Instead, consumers must use a private arbitration firm chosen by the business itself. A study of decisions by one major arbitration firm found that arbitrators rule for the corporations that hire them 93.8 percent of the time.
That doesn’t include the cases that are never brought at all because consumers or employees often must pay prohibitive fees just to go before arbitrators chosen by their adversaries. The alternative to going it alone is a class action, where consumers or employees band together. But forced arbitration clauses often ban class action suits.
Federal law has allowed arbitration for 88 years. But the law was intended as a voluntary alternative for parties with equal bargaining power. Congress never intended it to apply to employment contracts.
Read more about forced arbitration
Alliance for Justice is a national association of over 100 organizations, representing a broad array of groups committed to progressive values and the creation of an equitable, just, and free society. Through our justice programs, we lead the progressive community in the fight for a fair judiciary, and through our advocacy programs, we help nonprofits and foundations to realize their advocacy potential. Learn more about Alliance for Justice at afj.org.