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| Patrice Simms |
Real justice means having access to fair and independent courts — rather than private proceedings stacked to benefit wealthy corporations and polluters. Unfortunately, thanks to the proliferation of forced arbitration clauses, obscure provisions written into the boilerplate of many contracts, real justice remains little more than an illusion for so many people in the United States.
Thanks to new legislation spearheaded by Sen. Richard Blumenthal, D-Conn., and Johnson, there's a chance the right to seek justice in courtrooms will be restored. H.R. 1423 and its Senate companion bill, S. 610, would end the abusive practice of forced arbitration for consumers, employees, patients and those whose civil rights have been violated.
So what is forced arbitration? Often buried in the fine print of consumer contracts,[1] forced arbitration provisions require signers to waive their rights to access a court of law.
Instead, if a dispute later arises, the parties' only recourse is appeal to a private arbitrator (often hired and paid for by the defendant corporation or government entity), who presides over a private hearing that lacks many of the due process protections afforded by courts, including the right to appeal. Several recent decisions from the U.S. Supreme Court have harmed everyday people by expanding the interpretation of the 1925 Federal Arbitration Act to allow bad actors to force these boilerplate arbitration clauses on unsuspecting members of the public.
As a result, forced arbitration clauses are becoming as ubiquitous as they are insidious. It's harder than ever to apply for a credit card, call someone using a personal cell phone, get cable or internet service, or shop on the internet without agreeing to private arbitration.
Bank accounts, student loans, employment agreements, nursing home admissions and even civil rights disputes are increasingly falling prey to the practice, and when the deck is stacked against an individual member of the public, the consequences can be devastating.
Take the example of Equifax Inc.: When the company announced a data breach compromising personal information for over 140 million people, the company directed customers to a site to sign up for a free year of credit monitoring — only for the customers to find out that buried in the fine print was a provision waiving any right to sue Equifax for the breach and imposing forced arbitration instead.[2]
This story of abuse and denial of real justice in court repeats itself. See for example the 87-year-old-nun who was the victim of sexual assault, only to find herself blocked from suing her nursing home[3] for negligence because of, you guessed it, a forced arbitration clause in her contract.
Currently, the timber and mining industries are hoping to get in on the abuse, pushing to use forced arbitration to deny the public the right to challenge the federal government on U.S. Forest Service decisions[4] benefiting extraction industries' bottom lines.
For all these reasons, the FAIR Act is critical to restoring rights and preventing further abuse. H.R. 1423 and S. 610 would amend the Federal Arbitration Act to add a new chapter prohibiting any "predispute arbitration agreement or predispute joint-action (class action) waiver" for any "employment dispute, consumer dispute, antitrust dispute, or civil rights dispute."
This would have far-reaching protections for the public. The bill would also ensure that state and federal judges would decide on the applicability of this new prohibition to a particular dispute, rather than a private arbitrator. The bill would also guarantee that workers can seek judicial enforcement of any state or federal statutory or constitutional right, regardless of any collective bargaining agreement between labor organizations and employers.
Real justice will only be restored and protected for all when Congress acts to ban predispute, forced arbitration under federal law, which the FAIR Act will accomplish. Only then will we be able to hold corporations and other powerful entities accountable and ensure public access to meaningful remedies in fair, independent courtrooms.
Patrice Simms is vice president of litigation and head of the access to justice program at Earthjustice.
"Perspectives" is a regular feature written by guest authors on access to justice issues. To pitch article ideas, email expertanalysis@law360.com.
The opinions expressed are those of the author and do not necessarily reflect the views of Portfolio Media Inc. or any of its respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] https://accesstojusticereport.org/report/
[2] https://qz.com/1111768/equifax-breach-what-is-forced-arbitration-and-why-is-it-bad/
[3] http://time.com/5027063/87-year-old-nun-said-she-was-raped-in-her-nursing-home/
[4] https://billingsgazette.com/opinion/columnists/guest-opinion-tell-daines-no-on-mandatory-arbitration-rider/article_f7073553-cce3-5fc6-8d55-9ae607c23df3.html