Rep. Hank Johnson Introduces Arbitration Fairness Act to Protect Legal Rights of Consumers

Companies often hide a forced arbitration clause in the fine print of their contracts. By agreeing to this clause, consumers and employees surrender their right to sue in court. If a dispute arises, you must instead pursue arbitration.

Since the company typically chooses the arbitration venue, things usually end in the company’s favor. And according to legal experts, arbitration rulings sometimes run counter to law and are shielded from court review.

“Forced arbitration clauses undermine our indelible constitutional right to take our disputes to court,” said Rep. Hank Johnson, D-Ga. “They benefit powerful business interests at the expense of American consumers and workers.”

Johnson introduced the Arbitration Fairness Act (H.R. 1873) in the House last month. It would eliminate forced arbitration clauses in employment, consumer and civil rights cases, and gives consumers and workers the option to choose arbitration after a dispute occurred.

Senators Al Franken, D-Minn., and Richard Blumenthal, D-Conn., introduced an identical measure in the Senate.

“Workers and consumers should never be forced to give up their rights to get hired for a job or to get a cell phone,” Franken said. “I’ve introduced the Arbitration Fairness Act to ensure that workers and consumers have the right to choose arbitration over litigation, instead of being forced into it by corporations.”

This bill comes in response to the U.S. Supreme Court’s 5-4 decision in AT&T Mobility v. Concepcion. The divided court upheld the arbitration clause in AT&T’s agreement requiring its customers to submit their claim to individual arbitration.

In this case, Vincent and Liza Concepcion signed a two-year contract with AT&T for cell phone service and received what they were told would be two free phones. But the company charged them $30.22 in sales tax for the phones.

They sued the company for fraud and sought to consolidate their case in a class action. But AT&T’s lawyers told the court that the Concepcions signed a contract requiring them to pursue individual—not class action—arbitration.

Critics lamented that the high court’s ruling legitimized AT&T’s forced arbitration blueprint that other corporations could follow. They also complained that the court’s business-friendly majority went too far when it also allowed AT&T to deny its customers the right to pursue class-based arbitration.

“Consumers fighting for fundamental rights against giant corporations deserve their day in court,” Blumenthal said. “This new law would protect countless consumers in Connecticut and around the country from powerful companies that take advantage of them. When individuals have legitimate claims against big corporate interests, they have the right to a level playing field.”

Nigel Roberts is the United Nations correspondent for Politic365. He has been a political, economic and international affairs reporter for more than a dozen years. Nigel also freelances in public relations and communications. He holds a master’s degree in Political Science/International Relations from the City University of New York Graduate School & University Center.

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