Allred Votes to End Harmful Practice of Forced Arbitration

September 20, 2019
Press Release
Bill Ends Widely Used Practice That Prevents Consumers, Workers, Victims from Receiving Justice

Washington, D.C. – Congressman Colin Allred (TX-32) today voted for the bipartisan Forced Arbitration Injustice Repeal Act (FAIR). This bill prohibits the enforcement of mandatory, pre-dispute arbitration, also known as forced arbitration, which are provisions in contracts involving consumers, employment, antitrust and civil rights disputes.

“The right to go to court to protect yourself is an option everyone should have under the law, and this bill helps restore that right,” said Allred. “No institution should force folks to sign away their rights and have immunity from our nation’s laws. I am glad this bill received bipartisan support as it impacts nearly every family in North Texas and across the country.” 

Background:

Over the last several years, companies’ use of forced arbitration clauses, in such things as consumer and employment contracts, has proliferated dramatically. Today, forced arbitration clauses are virtually ubiquitous in everyday contracts. 

Large institutions bury forced arbitration clauses deep in the fine print of take-it-or-leave-it consumer and employment contracts. For millions of consumers and employees, the pre-condition – whether or not they are aware – of obtaining a basic service or product, such as a bank account, a cell phone, a credit card, or even a job, is that they must agree to resolve any disputes in private arbitration. This process tilts the scales of justice in favor of larger institutions which have significantly more resources than ordinary Americans. 

Examples:

  • This practice has resulted in a service member, Kevin Ziober, a Navy Reserve Lieutenant,  being denied his rights after being fired for being deployed to Afghanistan to serve our nation. 
  • Women who have brought workplace sexual harassment allegations were denied a trial by jury because they agreed to the terms of service in an app, which required forced arbitration in the fine print.  
  • A Texas oilfield worker tried to use the court system to ensure he and other employees receive overtime pay, as required by law. Shortly after the suit was filed, his employer announced that all employees would be subject to an arbitration system for all employment-related disputes. Even though he never signed an arbitration agreement, a court ruled that the employee did not have to sign the agreement to be bound by its terms; continuing to work for the employer after the employer gave notice of the arbitration agreement constituted an agreement.
  • A report from Texas Watch, details many stories of forced arbitration harming Texans, from nursing home residents to homebuyers, to consumers of all kinds. 

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