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U.S. House Votes to End Forced Arbitration in Corporate Contracts

FAIR Act would restore consumers’ and workers’ right to seek justice in court when harmed. A Senate vote is next.

Washington D.C. – The National Association of Consumer Advocates (NACA) is thrilled that the U.S. House has passed H.R. 1423, the bipartisan Forced Arbitration Injustice Repeal (FAIR) Act (225-186). The FAIR Act would end forced arbitration clauses in take-it-or-leave-it corporate contracts, restoring the rights of millions of consumers, workers, and small businesses to be heard in court when they are harmed by corporate misconduct.

The FAIR Act would not ban arbitration, but would make it voluntary, allowing consumers and workers to once again choose where and how to seek justice, said Ira Rheingold, NACA’s executive director. “The bill will reinstate rights and remedies for millions of people, including servicemembers and veterans, older Americans, and working families.”

As a virtual corporate “get-out-of-jail-free” card, forced arbitration clauses shut consumers, workers, and small businesses out of the court system and force them into secretive, private arbitration proceedings to get their complaints heard, often on an individual basis. In forced arbitration, evidence of wrongdoing can be suppressed and judicial procedure ignored. As a result, bad corporate actors in the marketplace have profited off of predatory and illegal conduct because there is little to hold them accountable.

“Forced arbitration is a rigged system that gives corporations a license to steal, helping them to escape accountability when they break the law and harm people,” said Christine Hines, NACA’s legislative director. “The U.S. House was perfectly right to vote to end it, and the Senate should follow suit. It’s time to turn the FAIR Act into law.”

NACA thanks the House leadership and majority for supporting and bringing the FAIR Act to a vote. We especially appreciate the efforts of Rep. Hank Johnson (D-Ga.), the original sponsor of the FAIR Act, who, for more than a decade, has led the fight in Congress to end the unjust corporate practice and its illogical restrictions on ordinary Americans’ legal rights.