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Rep. Johnson, Sen. Franken Re-Introduce Legislation to Keep the Courthouse Doors Open to Consumers, Workers

April 29, 2015

Sen. Al Franken introduces Senate companion; Bills would remedy Supreme Court ruling, restore consumers’ rights to justice through courts

WASHINGTON, D.C. — Today, U.S. Rep. Hank Johnson (D-GA) and U.S. Sen. Al Franken (D-MN) re-introduced the Arbitration Fairness Act of 2015, legislation that would greatly restore Americans’ rights to seek justice through the courts. The House bill — H.R. 2087 — would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, and would allow consumers and workers to freely choose arbitration after a dispute occurs. More than 66 members of the House signed onto Rep. Johnson’s bill and 12 Senate colleagues signed onto Sen. Franken’s bill.

“There is overwhelming evidence that forced arbitration creates an unaccountable system of winners and losers,” said Rep. Johnson. “Unlike America’s civil justice system, which has evolved through centuries of jurisprudence and social progress, forced arbitration obliterates the rule of law by permitting decisions that ignore established case law while making optional important procedural safeguards and guarantees of due process and fairness that are required by courts of law. Arbitrators are not required to have legal training or to be fair and independent in deciding cases. The arbitration process takes place behind closed doors and not in open court, which shrouds corporate misconduct in secrecy away from public scrutiny. Forced arbitration severely limits the right to appeal bad decisions, leaving courts with limited authority to vacate an arbitrator’s decision, which becomes final and binding. The result is a process that lacks both transparency and accountability, and which puts its thumb on the scale of justice to the benefit of corporations, and to the detriment of consumers and workers.”

Sen. Al Franken (D-MN) introduced the companion bill in the Senate.

“For years, I've been fighting to re-open the courtroom doors to consumers, workers, and small businesses in Minnesota,” said Sen. Franken. “Our legislation, the Arbitration Fairness Act, is a commonsense reform to our justice system that will restore Americans’ right to challenge unfair practices by corporations and ensure meaningful legal recourse when everyday Minnesotans and small businesses are wronged. It's clear that we're at a point where big corporations can write their own rules and insulate themselves from liability for wrongdoing — this can’t continue.”

What the Arbitration Fairness Act Does: When Congress enacted the Federal Arbitration Act (FAA) in 1925, its goal was to allow an alternative forum for businesses on equal footing to resolve their disputes. Today, a narrow majority of the Roberts Court has warped the FAA beyond all recognition to allow corporations to use forced arbitration in numerous contexts with practically no restrictions.

• The Arbitration Fairness Act of 2015 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 insist that individuals have a meaningful choice at a time when they can understand that choice: after a dispute has arisen.

• This legislation would allow pre-dispute mandatory arbitration to continue in business-to-business agreements. This legislation would not apply to collective bargaining agreements.

• The Arbitration Fairness Act would restore traditional market principles to the arbitration industry: giving consumers a choice to arbitrate creates a market in which arbitration companies have to compete for their business, instead of simply catering to corporations. When the choice of arbitration is post-dispute—and therefore understandable and voluntary—arbitration companies must offer a fair process that both parties would choose willingly.

What the Arbitration Fairness Act Does Not Do: The Arbitration Fairness Act of 2015 does not eliminate arbitration, but instead empowers individuals to arbitrate a claim after it arises. This distinction preserves arbitration as a useful tool for alternative dispute resolution among willing parties rather than a system that forces parties into arbitration before disputes arise.

Supporting Organizations: A broad coalition of over seventy public-interest groups — including Alliance for Justice, the American Association for Justice, the American Federation of Labor-Congress of Industrial Organizations (AFL-CIO), and Leadership Conference on Civil Rights — support ending forced arbitration in consumer and non-bargaining employment contracts.

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