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House Poised to Ban Mandatory Arbitration Clauses

In a decision that could affect cable agreements with their subs, the House is expected Friday to pass the Forced Arbitration Injustice Repeal Act (FAIR Act, H.R. 1423), but that leaves a Republican-controlled Senate to surmount.

The bill would eliminate mandatory 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.) have been 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.

Among those who have been publicly pushing for the bill was are a DirecTV customer, part of a class action suit over fees, a dispute DirecTV says must be resolved by arbitration, and ex-Fox journalist Gretchen Carlson, who has talked about forced arbitration clauses and her sexual harassment claims against late Fox News head Roger Ailes. She has said forced arbitration was a harasser's best friend because it "silences all the victims."

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 has pushed back on the legislative effort.

"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," said Public Citizen of the expected passage in the Democratically controlled House. "Today, the House finally stated: No more."

Its prospects are less bright in the Republican-controlled Senate, a point Public Citizen conceded. "We have no illusions about the challenge ahead," it said. "Preserving their forced arbitration get-out-of-jail-free card is a crucial priority of the U.S. Chamber of Commerce and big business. They are going to ratchet up their spending and lobbying, too. But the jig is up. People have caught on to big business’ schemes and aren’t willing to put up with them anymore. In the not-distant future, a mobilized public will overcome the Chamber and its ally, U.S. Senate Majority Leader Mitch McConnell (R-Ky.), and make the FAIR Act law."