NELP Welcomes Federal Legislation to Stop Forced Arbitration

Bill Protects Workers’ and Consumers’ Right to Band Together and Have Their Day in Court

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

“NELP commends the introduction of the Fair Arbitration Injustice Repeal (FAIR) Act, which would prohibit corporations from forcing workers, consumers, and small businesses to only resolve their disputes in private arbitration, by themselves, without access to the courts. The Act will restore access to justice, hold corporations accountable, and let workers and consumers decide whether they want to join together to right wrongs in the courts or in private arbitration.

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“Arbitrations are secret, paid for by the company, and have almost no oversight. The FAIR Act would prohibit the use of forced, pre-dispute arbitration clauses in employment and consumer contracts and prevent bosses from forcing workers to sign away their right to join together in a class or collective actions.

“America’s workers had long understood that when their bosses break the law—whether it’s wage theft, discrimination, or sexual harassment—they should have the right to seek justice in the courts and to band together to pursue legal action. After a series of Supreme Court cases, including the May 2018 Epic Systems decision, those rights are gone. In Epic Systems, the Court decided that corporations can force workers, as a requirement of getting a job, to sign arbitration clauses that nullify their right to join together.

“The #MeToo movement has illuminated how crucial it is for workers to be able to voice their concerns together—and how particularly harmful forced arbitration is to women fighting sexual harassment. Forced arbitration means having to pursue one’s claims alone, before a private arbitrator hired by the company, with a low likelihood of success and little chance to appeal. As Gretchen Carlson has noted, ‘If a woman’s being sexually harassed in the workplace and she has an arbitration clause, she’s screwed.’

“Acting together to challenge workplace wrongs doesn’t only matter to women fighting sexual harassment—it matters to all workers. When unscrupulous employers cheat low-wage workers out of wages, joining together to blow the whistle and demand justice in a public court of law is often the only way the workers can recoup what they have earned.

“There are many more examples: workers on shop floors denied time-and-a-half pay for overtime hours; overworked health aides on under-staffed hospital wards; and low-paid fast-food workers mislabeled as ‘assistant managers’ by their employers to skirt overtime pay requirements—these workers and many others are only able to get to the bottom of what’s going on, and get what they deserve, if they can act together.

“Currently, an estimated 60 million workers in America—56 percent of private-sector nonunion employees—have been subject to forced arbitration clauses, and of those, nearly one in three have lost the right to challenge wrongdoing in court and through collective legal actions. Following Epic Systems, those numbers are only going up.

“Forced arbitration takes away people’s right to have their day in court. It’s a backdoor way of repealing laws on the books. Wage laws, anti-discrimination laws, anti-harassment laws, and more—these protections are of little use if workers can’t enforce them. Law-abiding businesses lose out too, as their competitors break the law without disadvantage. We commend the bill’s lead sponsors—Rep. Hank Johnson (D-GA) and Sen. Richard Blumenthal (D-CT), who will introduce a companion bill in the Senate—for putting forward a legislative solution that respects the fundamental right of workers and consumers to band together and to have their day in court.”

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