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By Michele R. Fisher
Partner

Why you should care that forced arbitration agreements prevent you from having your day in court if you ever need it.

Today, February 11th, the Forced Arbitration Injustice Repeal (FAIR) Act is being introduced to the House Judiciary Committee. The FAIR Act seeks to ensure that workers, consumers, servicemembers, nursing home residents, ordinary investors, and small businesses harmed by bad actors will be able to bring claims in court, rather than being forced into private, secretive, corporate-controlled arbitration systems required by non-negotiable “take-it-or-leave-it” contracts. 

Companies routinely force people to sign arbitration agreements giving up their right to go to court if they are harmed before they even know they have been harmed.  Arbitration should be voluntary; this means both parties to a dispute should be able to decide after the alleged harm occurs if they agree to arbitrate their dispute rather than have their day in court. We need arbitration reform.

Reasons to support ending forced arbitration and only permitting it when it is agreed to after the dispute occurs are below:

  • Forced arbitration is a secretive process hidden in the fine print of the paperwork you fill out when you get a credit card, buy a cell phone, download an app, start a new job or check into a nursing home.
  • Forced arbitration enables corporations to break the law and avoid accountability.
  • Forced arbitration means that when a corporation violates the rights of their workers or consumers, they often cannot effectively enforce their rights.
  • These clauses make the shadowy process of private arbitration the only recourse; even when a loved one is sexually assaulted, is seriously injured or dies. Forced arbitration shields corporations from public judgement and allows wrongdoing to continue without scrutiny, leaving our nursing home residents and employees defenseless against abuse.
  • Arbitration prevents small businesses from banding together who are harmed by corporate practices such as theft and price-fixing.
  • Corporations know that most individuals will simply give up when faced with a forced arbitration; because the process is often one-sided and secret, there is virtually no incentive for corporations to follow the law, or to quickly and fairly handle consumer or worker claims.
  • Forced arbitration clauses leave American workers, consumers, and patients unable to enforce their constitutional right to hold law-breaking corporations publicly accountable.
  • If corporations know they won’t ever be held publicly accountable, our civil rights, as well as our public health and safety, are at risk. From the cars we drive, to the jobs we take, to the food we eat, any harm or misconduct can be kept secret.
  • Corporations use forced arbitration to silence sexual harassment survivors and discrimination victims, take advantage of consumers and undermine public health. Hidden in the fine print of contracts and app agreements, forced arbitration clauses force victims into secretive hearings and give a green light to bad actors to continue their misconduct.