Paul Samakow argues for litigation and against required arbitration procedures
for employer, consumer, and civil rights disputes as he shares details
on why a proposed legislation that would eliminate mandatory arbitration
would bring fairness back to consumer and employee rights cases. Read
about it here:
Legislation that would eliminate required
arbitration for employee, consumer and civil rights disputes was
proposed last month. It should be passed. Congress must act to restore
fairness.
Big business and corporate money, along with a corporate
friendly Supreme Court, have been enough in the past to defeat efforts
to bring fairness back to the arena of routine consumer and employee
rights. Unfortunately, the same thing is likely to happen again, and the
Arbitration Fairness Act of 2013 that has been introduced in the House
(and a similar bill in the Senate) will likely fail.
As the law
exists now, you do not have the right to file a lawsuit for many
consumer and employee and civil rights complaints. In these situations,
the law requires you to submit to binding arbitration. Binding means no
further review, no other options, no going to court.
If the
arbitration process were neutral, independent and not connected to
corporate purse strings, it might not be so bad. Unfortunately, in most
consumer, employment and civil rights cases, the likelihood of the
“little guy” prevailing is almost zero.
The existing law of our
land, the Federal Arbitration Act, has been interpreted by the pro-big
business Supreme Court and thus gives businesses a significant advantage
in resolving disputes with us. We are forced into binding arbitration,
and the Court says this is legal. Legislation is needed to turn back
the clock and restore fairness.
Most contracts we sign with big
business today include mandatory arbitration clauses. These include
contracts for cell phones, credit cards, mom’s or dad’s nursing home,
and even on-line user agreements. Thus, when presented with these
contracts, where the arbitration clauses are in fine print and often in
difficult-to-understand legalese, we routinely sign, and thus, we
“voluntarily” give up the right to file a lawsuit if there are problems.
The
same thing happens in routine employment civil rights matters. Most big
business or large corporation employee handbooks state that the
employee cannot sue their employers, and that they must submit to a
binding arbitration process for almost any issue.
The arbitration
process is usually secretive and it is far from independent. Hearings
are closed, unlike what you see in courtrooms across America or even on
television. There is no appeal or next level review.
Arbitration
panels are overwhelmingly funded by big business. Thus, to assure they
keep getting the work, arbitrators almost always rule in favor of the
business. They understand that decisions against the business will
result in their firms not being used again.
When we lose access to
the courts, corporations are effectively given a license to steal. Our
ability to seek justice in the courts, even when up against the most
powerful corporate interests, is an essential part of our democracy.
Here are selected portions of the proposed legislation:
Section 2: Findings:
(3)
Most consumers and employees have little or no meaningful choice
whether to submit their claims to arbitration. Often, consumers and
employees are not even aware that they have given up their rights.
(4)
Mandatory arbitration undermines the development of public law because
there is inadequate transparency and inadequate judicial review of
arbitrators’ decisions.
Section 4: Definitions:
(2) civil rights dispute means a dispute—
(A) arising under—
(i) the Constitution of the United States or the constitution of a State; or
(ii) a Federal
or State statute that prohibits discrimination on the basis of race, sex, disability,
religion, national origin…in education, employment, credit, housing, public
accommodations and facilities, [or] voting….
(3) consumer dispute means a dispute between an individual who seeks or acquires
real or personal property, services (including services relating to securities and other
investments), money, or credit for personal, family, or household purposes….
(4) employment dispute means a dispute between an employer and employee arising
out of the relationship….
Sec. 402. Validity and enforceability
(a)
In General- Notwithstanding any other provision of this title, no
pre-dispute arbitration agreement shall be valid or enforceable if it
requires arbitration of an employment dispute, consumer dispute,
antitrust dispute, or civil rights dispute.
This legislation
broadly defines “employment dispute,” and in it “consumer dispute” is
defined broadly enough to include a wide range of legal conflicts. If
passed, this bill would eliminate arbitration as the required course of
action for employee claims – as well as those brought by consumers –
unless all parties agreed to arbitration once the dispute was
identified.
U.S. Representative Hank Johnson (D-GA) and Senator Al
Franken (D-MN) introduced this needed legislation. Johnson said in so
doing that “forced arbitration clauses undermine our indelible
Constitutional right to take our disputes to court.”
“Mandatory
arbitration can be a huge disadvantage to consumers, often limiting
their ability to have any meaningful legal recourse when they are
wronged,” Sen. Franken said. “I’ve reintroduced the Arbitration Fairness
Act to ensure that consumers maintain their right to their day in court
when they are cheated.”
The Supreme Court, an ally of big
business and corporate interests over the last several years, has helped
those interests in several holdings and in so doing has further eroded
consumers’ rights. In one case, Stolt-Nielsen v. Animal Feeds
International, 2010, the Court upheld as valid required arbitration
agreements for class action claims. In another, AT&T Mobility LLC v.
Concepcion, 2011, the Court held that arbitration agreements may ban
class actions even when such a ban was expressly prohibited by state
law.
These holdings seriously harmed consumers’ rights and served
to further protect corporations from accountability. Class actions were
designed to allow many individuals with similar claims, too small in
nature or dollars to prosecute by themselves, to join together to try to
right a common and recurring wrong. By stripping the class from the
right to file a unified lawsuit, requiring instead arbitration, the
little guy is once again kept down and effectively never heard from.
The
existing law, the Federal Arbitration Act (FAA), was originally passed
to make sure that the courts enforced commercial arbitration agreements,
that is, between companies, not between companies and consumers. The
Supreme Court’s rulings allow big business and corporate America to
insulate themselves from liability in small one-by-one cases and in
attempted larger, what-would-have-been class action claims.
Because
of the rulings by the Supreme Court that interpret the Act in an
expansive anti-consumer fashion, Congress must act in order to restore
fairness.
Representative Johnson and Senator Franken have been
consistent advocates for the little guy. In 2009 Sen. Franken passed
legislation with bipartisan support that restricted funding to defense
contractors who committed employees to mandatory binding arbitration in
cases of sexual assault and other civil rights violations. Rep. Johnson,
a longtime advocate of workers’ and consumer rights, first introduced
the Arbitration Fairness Act in 2007.
Their proposed legislation would change the FAA by:
1. Invalidating agreements that require arbitration in employment, consumer or civil rights disputes;
2.
Restoring the rights of workers and consumers by allowing them to seek
justice in the courts (and court process is open and transparent, so all
of the world can see and decide if claims and defenses are legal, valid
and reasonable);
3. Protecting the intent of the Civil Rights
Act, the Equal Pay Act, the Americans with Disabilities Act, and the Age
Discrimination in Employment Act, and more.
Let your elected
officials know that the current state of the law in this country
regarding mandatory arbitration needs significant change.
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