Having a dispute with a large corporation? Chances are you can’t sue them, but that could change.
The U.S. House of Representatives today passed the Forced Arbitration Injustice Repeal (FAIR) Act, which outlaws the practice of contractually demanding that employees and consumers use private dispute resolution. That means workers and the public could bring them to court.
The vote was 225-186.
Forced arbitration clauses have “seeped into just about every nook and cranny of our lives, including cell phone contracts, medical bills, employee handbooks, credit cards, nursing home contracts – you name it,” Congressman Hank Johnson, the Democrat from Georgia who is the chief sponsor of the bill, said in a statement. “The deck has been stacked against American consumers in favor of big business for far too long. This is just another tool for powerful corporate interests to avoid accountability.”
The bill now moves to the Senate, where Connecticut Democrat Richard Blumenthal is the sponsor.
“Corporations use forced arbitration clauses in contracts as a get-out-of-jail free card,” said Public Citizen, a not-for-profit consumer advocacy group. “Corporate apologists for arbitration often say it is an alternative venue to obtain justice. But in practice, it just means cheated or abused consumers, employees and others are out of luck.”
The organization cited as example scenarios banks overcharging customers, sexual-harassment and -assault victims unable to tell their stories, and staffers denied overtime who can’t band together to sue.
The White House opposes the FAIR Act. In a statement on Tuesday, the Office of Management and Budget said the bill would “increase litigation, costs, and inefficiency, including by exposing the vast majority of businesses to even more unnecessary litigation.”
It also said that if the FAIR Act were presented in its current form to President Trump to sign, his advisers would recommend a veto.