Earlier this month, the U.S. Senate Judiciary Committee held a hearing titled “Arbitration in America.” U.S. Sen. Lindsey Graham, who chairs the committee, showed leadership in tackling a serious obstacle to justice for ordinary consumers and workers, including service members, veterans and older Americans.
Arbitration clauses are often imposed in contracts for nursing homes, consumer finance, employment and cell phones, impacting everyone in our country. This is not the first time Graham, of South Carolina, has stood up for consumers on this important issue; he also voted against the Continuing Resolution Act in Congress, which was filed to repeal a rule enacted by the Consumer Financial Protection Bureau to prohibit these clauses in consumer contracts.
Forced arbitration clauses block consumers, workers, and small businesses from seeking justice in open court, giving corporations the power to force legitimate complaints into secretive, unfair, and lawless arbitration proceedings. These clauses often impact those who most need their day in court and deprive them of presenting their case before a jury of their peers. Often a defender of the rule of law and access to justice, Graham is uncomfortable with forced arbitration being used against everyday Americans.
In fact, in the past, Graham tried to protect service members from forced arbitration by introducing legislation that made clear that service members could choose to settle claims in arbitration only if all parties consent in writing to go to arbitration after their claims arise. In essence, this bill that did not pass would have ensured that service members would have the right to go to court.
Unfortunately, Senator Graham also advocates for class action reform, which would counteract any progress made by forced arbitration reform. Unlike forced arbitration clauses, class actions are critical for American consumers, workers and small businesses seeking remedies when ripped off or exploited by big corporations. Reforming class actions would compromise the ability of these everyday Americans to come together and resolve widespread and systemic harm related to violations of state and federal consumer protection, civil rights, investor rights, workplace rights and fairness, fair competition laws and other protections. It allows individuals to be represented in court on complicated cases that could not ever be economical to litigate individually. Class actions should not be restricted by corporate forced arbitration clauses or by lawmakers. Any effort to do so will only enable big businesses to further facilitate these violations.
To further lead in protecting consumers we must encourage Graham to support workers and small businesses in South Carolina and throughout America, by supporting the Forced Arbitration Injustice Repeal (FAIR) Act introduced by U.S. Sen. Richard Blumenthal of Connecticut and Rep. Hank Johnson of Georgia. The FAIR Act would bar forced arbitration from deciding the outcome of consumer, civil rights, employment, or antitrust violations. It would restore the right of financially and/or physically harmed consumers and workers to choose whether to go to court before a judge and jury. The only solution to fully restore consumer rights is to eliminate forced arbitration clauses in contracts so that ordinary people will have the freedom to choose how they seek justice, whether that be in court or by other means.