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Posted: March 8, 2017 9:44 a.m.

Sen. Al Franken, Rep. Hank Johnson lead fight to end unfair forced arbitration agreements

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Lawmakers Convene Event in Effort to Restore Rights of Consumers, Workers, and Small Businesses to Seek Justice through Courts

WASHINGTON, D.C.—Tuesday, U.S. Sen. Al Franken (D-Minn.) and Rep. Hank Johnson (D-Ga.) convened a wide-ranging Capitol Hill coalition—attended by several Senators, Congressmen, and advocates like former Fox News anchor Gretchen Carlson—to highlight the importance of the rights of consumers, workers, and small businesses to seek justice through the courts.

Ahead of this month’s Senate hearing to debate the President’s nominee for the Supreme Court, the lawmakers introduced several pieces of legislation to limit the use of forced arbitration clauses, which prevent Americans from seeking justice through the courts. The most comprehensive of the measures, the Arbitration Fairness Act, was introduced by Sen. Franken, Rep. Johnson, and Sen. Patrick Leahy (D-Vt.) to eliminate forced arbitration clauses in employment, consumer, civil rights and antitrust cases.

“For years, I've been fighting to re-open the courtroom doors to consumers, workers, and small businesses in Minnesota,” said Sen. Franken, a member of the Senate Judiciary Committee. “Our legislation, the Arbitration Fairness Act, would help restore everyday Americans’ right to challenge unfair practices in court and ensure meaningful legal recourse. We’re at a point where big corporations can write their own rules and insulate themselves from liability for wrongdoing. That needs to change.”

“Forced arbitration closes the courthouse doors to Americans wishing to seek justice for a variety of civil claims, including sexual harassment and workplace discrimination,” said Rep. Johnson. “These arbitration clauses are often unwittingly entered into by consumers when they sign everyday contracts such as cell phone, car rental, credit card, and nursing home agreements to name a few. Forced arbitration undermines fundamental rights and protections guaranteed by the Constitution, federal and state law. Contrary to popular belief, arbitration decisions are final, binding, non-appealable, and strongly in favor of corporations. The result is a secretive and rigged process that prevents citizens from exercising their fundamental 7th Amendment right to a trial by jury.”

“When Americans enter into agreements to obtain cell phone service, rent an apartment, or accept a new job, most are not made aware of the forced arbitration clauses that are tucked away in the legal fine print,” said Sen. Leahy. “But these dangerous provisions force us to abandon our Constitutional right to protect ourselves in court, and instead send hardworking Americans to face wealthy corporations behind closed-doors in private arbitration. This must change.”

From nursing home contracts and employment agreements to credit card and cell phone contracts, big business uses forced arbitration clauses to restrict Americans’ access to justice by stripping consumers and workers of their right to go to court. Instead, consumers and workers are forced into an arbitration system where corporations can write the rules; everything can be done in secret, without public rulings; discovery can be limited, making it hard for consumers to get the evidence they need to prove their case; and there’s no meaningful judicial review, so there’s nothing a consumer or employee can do if the arbitrator gets it wrong. In 1925, Congress passed the Federal Arbitration Act (FAA).

The legislative history of the FAA makes clear that Congress intended to target commercial arbitration agreements between two companies of generally comparable bargaining power. However, over the years, the Supreme Court has slowly broadened the reach of the FAA, ignoring evidence that the FAA was never intended to apply to consumer or employment disputes, or to supersede all other federal laws protecting consumers, workers, and small businesses.

• The Arbitration Fairness Act of 2017 reflects the FAA's original intent by requiring that agreements to arbitrate employment, consumer, civil rights or anti-trust disputes be made after the dispute has arisen.

• This legislation would not prohibit arbitration, but instead ensure that individuals have a meaningful choice about how to proceed with their claim after a dispute has arisen. You can read a summary of Sen. Franken and Rep. Johnson’s Arbitration Fairness Act by clicking here.

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