CNBC reports the House of Representatives Judiciary Committee passed the bipartisan Forced Arbitration Injustice Repeal Act, which “would eliminate companies’ ability to use forced arbitration clauses in any employment, consumer and civil rights cases and allow Americans to fight their lawsuits in federal court.” Arbitration would be a voluntarily process instead of the “only option.” Companies often say “they use arbitration because it saves everyone involved time and money,” but consumer advocates say it rarely results in monetary relief and helps hide patterns of wrongdoing. House Judiciary Committee member Rep. Pramila Jayapal (D-WA) called forced arbitration “a perpetually rigged deck against the most vulnerable party in the dispute.”
AAJ report shows only a small number of cases end up in arbitration
A new report from the American Association for Justice“shows that not only do companies typically emerge victorious from arbitration, but, perhaps more damning, they rarely even have to use the process,” HuffPost reports. AAJ researchers examined consumer and employment cases filed over a five-year period ending in 2018 at the American Arbitration Association (AAA) and Jams “and discovered only about 30,000 recorded cases on file.” In comparison, “about 2 million cases are filed in small claims court every year in the United States.” AAJ researchers found that “overall, employment cases that landed in arbitration didn’t fare very well for workers.” Julia Duncan, public affairs director at AAJ, said, “When you look at this data, the amount of people that ever go to arbitration, forget about getting any money.” Duncan adds, “It is so small that what you find is that forced arbitration is not really an alternative forum, it’s virtual immunity [for companies].”
Update:
House passes bill to ban forced arbitration
ThinkAdvisor reported, “The full House passed the Forced Arbitration Injustice Repeal Act (FAIR) Act, HR 1423, to end forced arbitration.” The bill, “which passed by a 225–186 vote, prohibits pre-dispute arbitration agreements that require arbitration of future employment, consumer, antitrust or civil rights disputes, as well as allows individuals, workers, and small businesses to bring joint, class or collective action in these disputes.” ThinkAdvisor added, “Mandatory arbitration ‘allows large corporations to systematically evade accountability when they break the law,’” American Association for Justice CEO Linda Lipsen said in a statement. Lipsen added, “When this bill passes both houses of Congress, corporations will no longer be allowed to immunize themselves and silence employees, consumers, nursing home residents, sexual assault survivors and victims of financial fraud.”
From the news release of the American Association for Justice.
