House approves Democrat-backed bill ending mandatory arbitration

House approves Democrat-backed bill ending mandatory arbitration
© Greg Nash

The House passed legislation Friday aimed at preventing mandatory arbitration in consumer and employment contracts in a 225-186 vote that generally fell along party lines.  

The Forced Arbitration Injustice Repeal Act of 2019, or FAIR Act — spearheaded by Rep. Hank JohnsonHenry (Hank) C. JohnsonHouse Democrats may call new impeachment witnesses if Senate doesn't Democrats approve two articles of impeachment against Trump in Judiciary vote Democrat calls Gaetz the 'pot calling the kettle black' after Hunter Biden drug-use comments MORE (D-Ga.) — would also ban limits on class action lawsuits. 

Democrats backing the bill argue it places more power in the hands of consumers and is a critical step in holding businesses accountable for their actions, products and services.

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“The FAIR Act would restore justice to millions of Americans," Johnson said during the floor debate.

"We're a country of justice and fair play. When people cheat, we take pride in holding them accountable before a jury in a court of law, but forced arbitration clauses hidden in the fine print deprive victims of their day in court before a jury of their peers,” he said.

He said forced arbitration allows corporations to use "secret proceedings" that put their opponents at a disadvantage.

"Predictably, the end result is the corporation wins and the victim is deprived of justice," Johnson said. "Because the proceeding is secret, the public never learns what happened.” 

Critics of the bill said the legislation would fail to prevent abuse, arguing arbitration provides consumers with a “simpler, cheaper, faster path” than the judicial system in settling consumer and employment disputes. 

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“Even the Consumer Financial Protection Bureau’s 2015 study of arbitration highlighted problems consumers would face if they had no access to arbitration, but instead had to rely on flawed judicial class actions," Rep. Doug CollinsDouglas (Doug) Allen CollinsMedia's selective outrage exposed in McSally-Raju kerfuffle The five dumbest things said about impeachment so far Pelosi accepts Collins's apology for saying Democrats are 'in love with terrorists' MORE (Ga.), the ranking Republican on the House Judiciary Committee, said during the debate.

"The study showed the rise of pre-dispute, mandatory binding arbitration agreements in consumer settings did not come out of nowhere. It stems directly from the repeated abuses of class actions that have plagued the judicial system in recent decades,” he said. “That is not to say the arbitration system is perfect, but the arbitration system is generally good and should be preserved.” 

The bill is likely to see little movement in the Republican-controlled Senate. 

Just two Republicans in the House backed the bill: Reps. Matt GaetzMatthew (Matt) GaetzGaetz in Twitter battle with Florida House Republican Apple under pressure to unlock Pensacola shooter's phones Conservatives slam Warren's call to put transgender women in women's prisons MORE (Fla.) and Chris SmithChristopher (Chris) Henry SmithHouse votes to temporarily repeal Trump SALT deduction cap GOP lawmaker to offer bill to create universal charitable deduction on 'Giving Tuesday' China threatens 'strong countermeasures' if Congress passes Hong Kong legislation MORE (N.J.). Reps. Henry Cuellar (Texas) and Collin PetersonCollin Clark PetersonThe Hill's Morning Report - Dems to lay out impeachment case to senators next week House delivers impeachment articles to Senate Overnight Defense: Foreign policy takes center stage at Democratic debate | House delivers impeachment articles to Senate | Dems vow to force new vote on Trump's border wall MORE (Minn.) were the only Democrats to vote "no."