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How Congress can fight racial discrimination: Pass the FAIR Act


Last week, in a resounding victory, the House passed the Forced Arbitration Injustice Repeal (FAIR) Act, which would prevent corporations from requiring individuals or small businesses to arbitrate any civil rights, employment, consumer, or antitrust dispute. Now, it is critical the Senate swiftly moves ahead to ensure access to justice for Americans everywhere by passing the FAIR Act and bringing it one step closer to law. 

The MeToo movement brought to light the dangers of forced arbitration. Celebrities such as Gretchen Carlson spoke out about how these hidden clauses prevent employees and consumers from seeking justice in court. In fact, most Americans have – often unknowingly – signed away their constitutional right to sue in court. Instead, they are sent to private arbitration that is heavily rigged in the favor of large employers and corporations. Fortunately, on March 3, President Joe Biden signed into law the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act. The Act voids forced arbitration clauses for claims of sexual assault or harassment in the workplace, at school, and even in relation to housing and health care. However, while the Act was a critical step forward, the Senate must take final action to pass legislation that will protect the millions of people the Act left behind. Forced arbitration is still occurring for other types of cases on behalf of workers, consumers, patients in nursing homes, investors, and others. 

Take the case of Owen Diaz. He experienced years of racial harassment and verbal abuse at Tesla. The abuse – which ranged from witnessing swastikas to being told to “go back to Africa” – caused him to lose weight and sleep. His win in court was rare: because he was a contractor, not a formal Tesla employee, Diaz had not signed a forced arbitration clause. However, those of Diaz’s colleagues who  experienced the same discrimination, but are employees, cannot achieve the same result. In fact, Tesla is currently fighting a class action racial discrimination case, arguing that it should be sent to arbitration.  And in the wake of his case, Tesla has even imposed a forced arbitration clause on current and future contractors. 

Forced arbitration, however, is not just limited to the workplace. These clauses are also prevalent in consumer contracts, including “44 percent of checking account contracts, 53 percent of credit card contracts, 83 percent of prepaid credit card contracts, 98 percent of tuition agreements at for-profit colleges, and 99 percent of payday loan agreements.” Particularly appalling are the practices of predatory payday lending companies, which set up shop disproportionately in communities of color – so much so that Black people are 105 percent more likely than other racial groups to use payday lenders. This means that forced arbitration hits communities of color both in the workplace and in their daily lives.  

The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act leaves out people like Diaz and his colleagues, who experienced racial harassment not sexual harassment. This also raises the question: What happens if someone experiences multiple kinds of harassment? Or sex-based pay discrimination? Or intimidation? The Act’s narrow scope means that an employee who experienced abuse based on multiple identities — for example, race, gender, immigration status, and disability — is in a position of being able to litigate some claims but not others. A person would have to parse out their characteristics, undoing decades of efforts to show that people can experience discrimination based on their intersecting identities.  

Divvying up claims between arbitration and courts is not only impractical, but also a waste of judicial and litigant resources. Employees who experience discrimination and harassment on any basis deserve to have their day court. 

MeToo brought to light sexual harassment in fields ranging from tech to journalism. However, the solution cannot focus only on professions where people are already likely to have economic stability and access to resources. People with the fewest resources are the most likely to experience multiple kinds of workplace abuse. Consider that nearly eight in ten farmworker women experience sexual harassment on the job. Under a law that only ends forced arbitration for sexual harassment, how could a farmworker fully seek accountability for workplace intimidation that also includes threats of deportation, wage theft, unsafe living conditions, and racial harassment? The short answer: She could not. If a solution only protects those who already have the most resources, then it is not a solution at all. 

That is why it is critical for elected officials to step up and declare what voters across political lines agree: That people should always have the right to their day in court. The Senate must pass the FAIR Act without further ado, and affirm every person’s choice to seek justice on their own terms.  

Paul Bland is Public Justice executive director. 

Tags Arbitration clause Joe Biden MeToo movement Sexual harassment

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