Arbitration Fairness Act would reopen courthouse doors for millions of Americans

AFJ released this statement today on the reintroduction of the Arbitration Fairness Act:

Coast Guard delivers supplies to the
"cruise from hell"

Federal legislation introduced on May 7 to ban the increasingly common practice of forced arbitration “is urgently needed to reopen the courthouse doors to millions of Americans,” according to Alliance for Justice President Nan Aron.

Aron commended Sen. Al Franken (D-Minn.) and Rep. Hank Johnson (D-Ga.) for reintroducing the Arbitration Fairness Act, which restores Americans’ rights to have their day in court. Those rights have been undermined by the increasing use of forced arbitration and a series of recent Supreme Court decisions, most notably AT&T Mobility v. Concepcion.

“From cell phone purchases to nursing home agreements, to gaining employment, consumers and employees are being forced to accept arbitration clauses – and to potentially cede their civil and labor rights – in every aspect of their lives.

Sen. Al Franken

Rep. Hank Johnson

“For example, anyone who saw the pictures of conditions aboard the Carnival Cruise ship Triumph after it was disabled by a fire knows why it was dubbed ‘the cruise from hell,’” Aron said.  “But those passengers may have a hard time suing.  When they bought their tickets, there was a forced arbitration clause in the fine print.”

Under forced arbitration, consumers who buy defective products or are overcharged for a service are barred from taking their cases to court.  Instead, they must use a private arbitration firm chosen and paid for by the business itself.  Forced arbitration clauses also often ban class-action suits, which allow individuals to band together to bring their common claims.

In addition to Carnival, the photo sharing service Instagram uses forced arbitration – and some fear Instagram’s parent company, Facebook, may be next.  The practice is also spreading to employment contracts, threatening to make it nearly impossible for workers to sue over race, sex or age discrimination.

“Having a dispute settled by arbitration is like playing a baseball game in which the other team hires, fires – and pays – the umpires,” Aron said.  She noted that a study of top arbitrators for one major arbitration firm found that they rule for the corporations that hire them 93.8 percent of the time.

“The forced arbitration system gives corporations a free pass to break the law,” Aron said.  “The Arbitration Fairness Act would revoke that free pass.”

Read more about forced arbitration

● An overview of forced arbitration 
● AFJ’s report Arbitration Activism
● AFJ reports on AT&T Mobility v. Concepcion
● Press release from Rep. Johnson
● Press release from Sen. Franken
● Letter of support from AFJ and more than 40 other organizations