Legislators Introduce Arbitration Act

Advocacy Groups Chastise Take-It-Or Leave-It Contracts

WASHINGTON, D.C. (Blue MauMau) - Senator Russ Feingold and Representative Hank Johnson introduced yesterday the Arbitration Fairness Act of 2007. Joan Claybrook, president of Public Citizen stated, "Let me be blunt. Privatizing justice benefits big corporate interests like national banks and insurance companies but does not help ordinary people." Franchise was added to the cause, along with employment, consumer, and civil rights, stating that comprehensive legislation was needed to ensured that Americans are not forced into mandatory arbitration agreements.

Claybrook said that the lack of any meaningful independent review of arbitration decisions creates a climate ripe for abuse. She said, "The arbitration process is secretive and, of course, the courts have little involvement." Claybrook also stated that arbitration companies are beholden to big corporate players for repeat business, which creates a bias, saying, "They do not bite the hand that feeds them." As an example, she gave statistics showing that one California arbitrator who ruled in 532 cases, 526 were in favor of business--in this case, a mere 1.14 percent for ordinary consumers.

Jon Haber, CEO of the American Association for Justice (AAJ), gave a statement saying, "Mandatory arbitration prevents people from having a fair chance to receive justice through the legal system when they are injured by the negligence or misconduct of others. Increasingly, corporations and their CEOs are using mandatory arbitration clauses to weaken basic legal protections and further stack the deck against Americans." The statement adds that the Arbitration Fairness Act of 2007 would prohibit the use of pre-dispute arbitration in consumer, employment and franchise agreements.

It's Not Just Business, It's Personal

As legislators discussed the bill at yesterday's press conference, several people harmed by mandatory arbitration agreements in different aspects of business sat on the front row eager to show support for the Act. Among them were Coffee Beanery franchisees Deborah Williams and Richard Welshans. According to Williams the experience was overwhelming and emotionally draining. She said the people attending from the advocacy groups could recognize that there was something terribly wrong with their situation. She said, "We felt we were surrounded by people who could really feel our pain and who sincerely wanted to help." Williams and Welshans have a new strength to keep fighting until they get justice, which they feel they deserve. "After yesterday we know that we have more people out there who are going to join us in our fight," according to Williams. "We're not alone anymore."

Telephone calls to Public Citizen and American Association for Justice were not returned prior to publishing this article.

• Senator Feingold Press Conference, audio streaming (24 min.)