Dems Take Aim at Forced Arbitration Clauses

Bills have been introduced in the House and Senate that would eliminate mandatory/forced arbitration clauses like those in consumer and employment agreements (including some broadband, cable and cell phone contracts) that attempt to foreclose class action suits by designating disputes to an outside arbitrator.

Rep. Hank Johnson (D-Ga.) and U.S. Sen. Richard Blumenthal (D-Conn.) are leading the charge for the Forced Arbitration Injustice Repeal (FAIR) Act of 2019, which would prohibit mandatory arbitration in "consumer, civil rights, employment, and antitrust' actions.

All Americans deserve their day in court said Rep. Jerry Nadler (D-N.Y.), chairman of the House Judiciary Committee. "This misleading and unjust practice must end," he said.

"The FAIR Act would greatly restore Americans’ rights to seek justice and accountability when hurt by a corporation," Johnson said in a Facebook post. "Americans with few choices in the marketplace may unknowingly cede their rights when they enter contracts to buy a home or a cell phone, place a loved one in a nursing home, or start a new job. We must fight to defend our rights and re-empower consumers. Support The FAIR Act. #EndForcedArbitration.

Sen. Blumenthal tweeted the Capitol Hill announcement Thursday (Feb. 28).


"Corporations of all sorts insert forced arbitration provisions into worker and consumer contracts, and effectively wipe away people's protection against financial rip-offs, wage theft, online swindles, harassment and discrimination and more," said Public Citizen in praise of the bills.

One of the participants in the bill announcement was a DirecTV customer, part of a class action suit over fees, a dispute DirecTV says must be resolved by arbitration.

Ex-Fox journalist Gretchen Carlson also spoke about forced arbitration clauses and her sexual harassment claims against late Fox News head Roger Ailes. She said arbitration was a harasser's best friend because it "silences all the victims."

She said no one expects to get into a dispute a work, but such clauses silence people who have the guts to speak out. She pointed out that Microsoft, Google, Vox Media, Facebook and others have already agreed to take such clauses out of their employment contracts.

Under former FCC chair Tom Wheeler, the FCC back in 2016 looked into the contractual requirements that a sub seek private arbitration, rather than lawsuits (particularly class action suits)--to settle disputes with their cable or Internet service provider, but action was not taken to eliminate them.

The U.S. Chamber of Commerce pushed back on the legislative effort.

“The trial bar and its congressional allies are once again setting the stage to try to eliminate arbitration and flood the courts with a wave of lawsuits," said Lisa A. Rickard, president of the U.S. Chamber Institute for Legal Reform (ILR). "For many Americans, arbitration has proven to be a better path to justice for nearly 100 years because it is simpler, fairer, and faster than going to court. Most arbitration cases can be done without the services of a trial lawyer, which is the problem for the plaintiffs’ bar."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.