NELP Applauds Consumer Financial Protection Bureau’s New Rule Against Forced Arbitration Clauses

Washington, DC—Following is a statement from Christine Owens, Executive Director, National Employment Law Project:

“The National Employment Law Project commends the Consumer Financial Protection Bureau for standing up for everyday people by adopting a rule that bans corporations from using mandatory arbitration clauses to deny consumers their day in court when they fall victim to corporate wrongdoing.

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“The new rule aims to restore consumers’ right to file or join group lawsuits, an essential mechanism in our justice system that has been severely weakened by the proliferation of forced arbitration clauses in everyday consumer and employment contracts. You’ve likely signed one of these clauses if you’ve opened a bank or credit card account, enrolled a parent in a nursing home, or even if you’ve started a new job.

“Forced arbitration clauses often block one’s ability to join with others in court, forcing everyday people instead to bring claims individually, outside of the court system, and before a private arbitrator who’s often chosen by the company.

“The CFPB’s action stands in contrast to the Trump administration. The Trump DOJ has recently voiced its support of corporations over workers in NLRB v. Murphy Oil, switching sides from the Obama DOJ’s stance on the case and abandoning 85 years of labor law precedent. The Trump administration turns its back on working people by siding with corporations bent on limiting the rights of workers through forced arbitration clauses in employment contracts.

“If the Trump administration really wants to keep its promises to working people, it would follow the lead of the CFPB and protect their right to their day in court, rather than making it even easier for corporations to use the fine print to rig the system at workers’ expense.”

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