Press Releases

Washington, D.C. - Today, House Judiciary Committee Chairman Jerrold Nadler (D-NY) delivered the following opening statement, as prepared, during the markup of H.R. 963, the Forced Arbitration Injustice Repeal (FAIR) Act: 

"H.R. 963, the 'Forced Arbitration Injustice Repeal Act' or the 'FAIR Act,' protects the rights of everyday consumers, workers, and small businesses by prohibiting the enforcement of forced arbitration clauses in consumer, labor, antitrust, and civil rights disputes.

"Nearly a century ago, Congress enacted the Federal Arbitration Act to allow merchants to resolve run-of-the-mill contract disputes in a system of private arbitration that would be legally enforceable. Congress intended this tool to be used voluntarily and only between merchants of equal bargaining power.

"However, in recent years the Supreme Court has expanded the use of arbitration far beyond Congress’s original intent—creating the unjust system we see today. 

"Through a series of decisions, the Court has transformed private arbitration from a voluntary forum for companies to resolve commercial disputes into a legal nightmare for millions of consumers, employees, small businesses, and others who are forced into arbitration and are unable to enforce certain fundamental rights in court. 

"As a result, powerful corporations use forced arbitration as a tool to insulate themselves from accountability for abusing workers, consumers, and small businesses.

"By burying a forced arbitration clause deep in the fine print of take-it-or-leave-it contracts, companies can evade the justice system, where plaintiffs have far stronger legal protections, and hide behind a one-sided process that is rigged in their favor.

"For example, arbitration generally limits discovery, does not adhere to the rules of civil procedure, can prohibit class actions, may have no right of appeal, and the proceedings—and often even the results—must stay secret, allowing companies to avoid public scrutiny of potential misconduct.

"For millions of consumers and employees, the pre-condition of obtaining a basic service or product, such as a bank account, a cell phone, or even a job, is that they must agree to resolve any disputes in private arbitration. 

"Whether they know it or not, this means that their ability to enforce civil rights, consumer, labor, and antitrust laws are subject to the whims of a private arbitrator who is not required to provide plaintiffs any of the fundamental protections guaranteed in the courts. And for many companies, arbitration has become a get-out-of-jail-free card to circumvent the basic rights of consumers and workers. 

"As Professor Miriam Gilles of the Cardozo School of Law testified earlier this year, forced arbitration practice has eroded countless fundamental rights established by Congress by rendering them virtually unenforceable. As she explained, by secretly 'imposing these provisions in the small print of job applications, employment contracts, and consumer transactions, corporate executives have written their own rules, opting out of liability by shunting all cases against them into a private system of single-file arbitration.'

"H.R. 963, the FAIR Act, ends this shameful practice. Importantly, this legislation does not prevent parties from agreeing to arbitrate a claim after the dispute arises, which will ensure that arbitration agreements are truly voluntary and transparent.

"I applaud Congressman Johnson for his leadership on this bipartisan legislation, which currently has 201 cosponsors. This measure is also supported by a broad coalition of more than 70 public-interest organizations, including Public Citizen, Consumer Reports, the American Association of Justice, the Communications Workers of America, and the Leadership Conference on Civil Rights. And finally, 84% of Americans across the political spectrum support ending forced arbitration in employment and consumer disputes, according to recent polling data.

"H.R. 963, the FAIR Act, would restore access to justice to millions of Americans and I urge all my colleagues to support this important legislation."