UPDATE: On March 17, the House passed the FAIR Act (H.R. 963), sending it to the Senate for consideration. Read my brief statement urging the Senate to quickly pass this crucial bill.
UPDATE: On February 10, the Senate passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (H.R. 4445), sending it to President Joe Biden for his signature. Read my brief statement on the importance of this legislation.
A few years ago, Roschelle Powers took a routine trip to visit her mom, Roberta, at her nursing home in Birmingham, Alabama. When Roschelle opened the door, she found her mother vomiting, disoriented — and clutching a handful of pills. Roberta’s son, Larry, visited a few days later and found his mom alone and unresponsive. She died soon after – with 20 times the recommended dose of her diabetes medication in her blood.
The Powerses charged the nursing home with misconduct, but the company denied responsibility — and the Powerses couldn’t take their case to court because they had signed a contract that robbed them of their right to a free and fair trial. Instead, contractual legalese forced them to settle their dispute in a rigged system of arbitration rather than in an impartial court of law.
My colleagues and I share this story, chronicled in a New York Times investigation of forced arbitration, in the opening pages of our new report about the disproportionate toll this widespread practice has on marginalized and vulnerable groups.
This system favors corporations over individuals for a number of reasons: Arbitrators, for example, have financial motives to rule in favor of corporations. They don’t have to follow the rules of evidence or other standard legal procedures, like explaining their decisions in writing or applying the law consistently. And they often can’t be overruled by a court.
It’s no surprise, then, that individuals seldom prevail in forced arbitration.
What’s more, few workers or consumers are even aware they are subject to forced arbitration clauses when they take a job, lease an apartment, buy a product, hire a service provider, or agree to receive health or medical care because the clauses are buried in legal fine print. The ban on class action lawsuits, meanwhile, blocks individuals from holding companies accountable for relatively small individual harms that affect large groups of people.
Robbing Marginalized People of Justice
As my colleagues and I explain in our new report, this system is especially harmful to vulnerable people, like Roberta Powers and others who live in nursing homes, as well as other disadvantaged groups, like people of color, women, and low-income people. Our report — Private Courts, Biased Outcomes — is the first to explore the especially harmful effects of forced arbitration on these communities and comes as we as a society consider the ongoing effects of systemic oppression during Black History Month.
We argue that low-income people, for example, are less likely to be able to pay required arbitration fees, absorb financial losses in a dispute resolution system that is stacked against them, or hire attorneys on a contingent fee basis. And low-income workers of color are more likely to be victims of wage theft and subjected to forced arbitration clauses.
Women and people of color, meanwhile, have fewer opportunities to obtain evidence in support of discrimination and sexual harassment claims and are more likely to be victims of implicit bias in arbitration because most arbitrators are white males.
And nursing home residents are forced to settle claims that go beyond financial harm and relate to physical injury or death caused by substandard care, neglect, and physical and elder abuse in a system that favors those accused of the harm.
These groups are already marginalized by racism, sexism, classism, ageism, and other entrenched systems of oppression. Forced arbitration disadvantages them further, barring them from holding companies accountable for harm and robbing them of their right to justice.
Widespread and growing
Unfortunately, the Powers family is not alone.
The practice of forced arbitration began in the 1990s in the wake of a U.S. Supreme Court case that gave companies the power to determine how claims are decided. Just three decades later, the practice now affects nearly every American consumer and more than half of all workers. And it’s spreading, quickly, creeping up in all manner of contracts.
The system is dismantling our nation’s storied system of civil justice — particularly for disadvantaged groups and vulnerable people like the Powers family.
We must put an end to it and, fortunately, we can. Congress can restore our ability to hold corporations accountable in the courts and can restore access to class action lawsuits, as well as federal judicial authority to enforce laws protecting people of color, women, and others from discrimination and other harms.
Legislation that would take steps toward these essential goals just passed Congress. Earlier this week, the House passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (H.R. 4445) by a wide margin, and the Senate passed the bill by voice vote on February 10.
Readers can also urge representatives to support the Forced Arbitration Injustice Repeal (FAIR) Act (S. 505) and call on House and Senate leaders to move it through Congress.
Now’s the time. Justice for all cannot wait.
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