Two important bipartisan bills introduced to protect many from unfair mandatory arbitration to settle disputes

In the last few weeks, Congress has introduced two separate bills that are critical to protecting consumer, employee, franchisee and nursing home residents' rights.  On February 12, 2009 H.R. 1020: Arbitration Fairness Act of 2009 was introduced.  This proposed bill declares predispute arbitration agreements/clauses signed by employees, consumers or franchisees invalid and corporations cannot not force arbitration to settle disputes.  The bill states arbitration can only be discussed after the dispute arises and the parties have to voluntarily agreed to engage in arbitration proceedings.  The proposed bill also includes any dispute arising out of a statute intended to protect civil rights as being protected from mandatory predispute arbitration agreements.  Arbitration provisions in collective bargaining agreements are exempt from this Act.  H.R. 1020 is currently with the Judiciary Committee for further review before the bill will be brought forward for general debate.

 

On February 26, 2009 H.R. 1237: Fairness in Nursing Home Arbitration Act of 2009 was introduced in the House and on March 3, 2009 the Senate introduced S. 512: Fairness in Nursing Home Arbitration Act.  The overall goal of these two bills are consistent; to prevent the enforcement of predispute arbitration agreements signed by nursing home residents or a person acting on their behalf.  As in H.R. 1020, these bills require a dispute to arise before arbitration can be discussed as a viable option for resolution and will only be used after the parties voluntarily agree that arbitration is the best option for that particular situation.  Both of these bills are in their respective committees.

 

These bills are important to putting individuals on a level playing field with large corporations.  As a consumer, there have been many times we have signed a mandatory predispute arbitration agreement in order to make a purchase for a good or service.  If we refuse to sign the arbitration agreement then we do without that good or service.  I would venture a guess that most of us have not had to use the arbitration process imposed upon us.  However, when a dispute arises and arbitration is the only recourse, individuals learn the hard way that in many arbitration agreements the corporations control the process and have an unfair advantage over the individual.  These predispute arbitration agreements also cover any and all disputes that arise, even if someone is seriously injured s/he is stuck with a mandatory arbitration process controlled by big business and access to the civil justice system is denied.  These proposed bills will give individuals a choice about how to proceed with their dispute and will provide them access to the civil justice system when appropriate.

 

I will be watching these bills as they make their way through the respective committees and will provide updates on the blog as information becomes available.

 

Shannon Keil