Two bills introduced in Congress this week to curb the pernicious practice of forced arbitration would “restore to millions of Americans the chance to stand up for their rights in court,” according to Alliance for Justice President Nan Aron.
Aron thanked Sen. Al Franken and Rep. Hank Johnson for reintroducing the Arbitration Fairness Act, which would prohibit forced arbitration in the consumer, employment, civil rights, and antitrust contexts. She also thanked Senate Minority Whip Dick Durbin, and Rep. Maxine Waters for introducing the Court Legal Access and Student Support (CLASS) Act, which targets the use of forced arbitration by colleges, where there have been many abuses by for-profit institutions.
Forced arbitration clauses require consumers and employees to take their disputes to private arbitrators effectively chosen by the businesses that wronged them. The proceedings are secret and there is no appeal. Forced arbitration clauses also typically bar consumers and employees from banding together to seek justice as a group.
Alliance for Justice exposed these abuses in a short documentary, Lost in the Fine Print. And last month the Consumer Financial Protection Bureau confirmed AFJ’s findings in a massive report documenting the harm done to consumers by forced arbitration.
“The CFPB findings are really no surprise,” Aron said. “At every step in the process forced arbitration stacks the deck against consumers. And it’s spreading to employment contracts. As a result, forced arbitration places at risk hallowed laws such as the Civil Rights Act of 1964, the Age Discrimination in Employment Act, and the Equal Pay Act,” Aron said. “If your employer harasses you at work because you’re a person of color, your employer pays you less because you’re a woman, or you get fired because of your age, you could be forced out of court – and forced accept the consequences without any chance to appeal.
“The Arbitration Fairness Act would end these kinds of abuses,” Aron said.
Lost in the Fine Print tells the story of victims of forced arbitration, including Debbie Brenner, who was lured by false promises from a for-profit college and wound up spending tens of thousands of dollars on a worthless degree.
A recruiter from Lamson, a for-profit college, told Debbie that once she got her degree, a job as a surgical technologist was virtually guaranteed. Based on that promise and claims the college made about its program and professors, Debbie signed up. But none of the promises was kept. In fact, Lamson had such an awful reputation among employers that Debbie couldn’t even get a job interview. All that time – and all that tuition money – had been wasted. But when Debbie and other Lamson students tried to sue the college, they were shut out of court – by forced arbitration.
Not only did the arbitrator rule against Debbie, the arbitrator ruled that she and several other students had to pay hundreds of thousands of dollars to the college for its legal fees. As Debbie says in the documentary, arbitrators “are not going to side against the corporation because they know that I’ll never sue somebody again, but the company definitely will get sued again.”
“The CLASS Act would give students like Debbie what every American deserves,” Aron said, “a fair shot at justice.”
Alliance for Justice, www.afj.org believes that all Americans have the right to secure justice in the courts and to have their voices heard when government makes decisions that affect their lives. We are 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.