If you have a cell phone, a credit card, or even if you just have a job, there’s a very good chance that you’ve been forced to sign away your right to sue your cell phone company, bank, or boss. Indeed, under the Supreme Court’s forced arbitration cases, your boss may order you to sign away your rights under penalty of termination.
On Thursday, Rep. Hank Johnson (D-GA) and Sen. Richard Blumenthal (D-CT) introduced legislation called the Forced Arbitration Injustice Repeal (FAIR) Act, which seeks to eliminate many forms of forced arbitration. Though versions of this bill have kicked around Congress for more than a decade — often under the name “Arbitration Fairness Act” — the FAIR Act stands out because of the broad coalition of lawmakers who now support it.
The House version of the legislation has 147 cosponsors, while 34 senators cosponsored their version of the FAIR Act.
Nearly a century ago, Congress passed the Federal Arbitration Act to, in Justice Ruth Bader Ginsburg’s words, allow “merchants with relatively equal bargaining power” to agree to resolve disputes through private arbitration — rather than through potentially more expensive litigation. In recent decades, however, the Supreme Court expanded the Arbitration Act — often ignoring the act’s explicit text in the process — to allow businesses to force workers and consumers into arbitration agreements, often stripping them of their ability to effectively sue the enterprise.
The Arbitration Act, for example, exempts “workers engaged in foreign or interstate commerce.” Nevertheless, in Circuit City v. Adams, the Supreme Court held that workers engaged in foreign or interstate commerce could be forced into arbitration. Similarly, the Arbitration Act says nothing whatsoever about class action lawsuits. Nevertheless, in AT&T Mobility v. Concepcion, the Supreme Court held that companies may add language to forced arbitration agreements that immunize the company from class actions.
The consequences of these decisions are severe. According to the Economic Policy Institute, workers and consumers are significantly less likely to prevail before an arbitrator than before a real judge, and they are awarded significantly less money when they do prevail.More ...