WASHINGTON – U.S. Sen. Al Franken on Monday renewed his call to limit what he calls "forced arbitration" in disputes between businesses and their customers and workers.
The Minnesota Democrat spoke to reporters in a telephone news conference reacting to new reports in the New York Times that echo Franken's concerns with language in everything from credit card contracts to job applications to nursing home leases that make people sign away their rights to sue.
Franken has three times sought legislative relief from the practice, which he says unfairly limits consumer and employee legal options for righting corporate wrongs. Those bills made predispute arbitration agreements invalid and unenforceable in employment, consumer, antitrust and civil rights matters. Franken reintroduced the legislation this year. It has 16 cosponsors and awaits action in the Senate Judiciary Committee where Franken is a member.
"It's about giving people the right to get to court," Franken said.
He called forced arbitration "unbelievably unfair." Arbitration hearings are secret, and the businesses being accused of misbehavior hire the arbitrators, whose decisions are essentially not able to be appealed.
The Supreme Court ruled mandatory arbitration legal in decisions in 2011 and 2012.
The U.S. Chamber of Commerce strongly backs arbitration agreements as fair and efficient.
Bryan Quigley, vice president of the Chamber's Institute for Legal Reform, called the New York Times series "blatantly one-sided." Quigley said bill's like Franken's will help personal injury lawyers make money on class-action suits, but those suits will not benefit consumers because most consumers have such small claims. They would be better served by arbitration, Quigley insisted.
Other business advocacy groups have also endorsed mandatory arbitration clauses.
Speaking to reporters, Franken and U.S. Rep. Hank Johnson, D-Ga., acknowledged the difficulty of getting Republicans to sign on to arbitration reforms bills in the Senate and House. Both offered hope of a regulatory solution if a legislative solution cannot pass.
Currently, the Consumer Finance Protection Bureau and the Centers for Medicare and Medicaid Services are each working on rules that will bring more attention to forced arbitration and possibly make it more transparent.
That is important, according to Minnesota Attorney General Lori Swanson, one of several state officials backing Franken's initiative.
"The public should not be stripped of their constitutional right to access the justice system through fine print buried in customer agreements," Swanson said in a statement to the Star Tribune.
Jim Spencer • 202-383-6123
