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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. JohnsonNAACP, Rep. Bennie Thompson sue Trump, Giuliani over Capitol riot House Judiciary Democrats ask Pence to invoke 25th Amendment to remove Trump Five things to watch during Electoral College battle 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 CollinsGeorgia Gov. Kemp says he'd 'absolutely' back Trump as 2024 nominee The Hill's Morning Report - Presented by The AIDS Institute - Finger-pointing on Capitol riot; GOP balks at Biden relief plan Perdue rules out 2022 Senate bid against Warnock 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) GaetzBipartisan bill would ban lawmakers from buying, selling stocks Some Republicans say proxy voting gives advantage to Democrats Wray says no evidence of 'antifa' involvement in Jan. 6 attack MORE (Fla.) and Chris SmithChristopher (Chris) Henry SmithDemocrats under pressure to deliver on labor's 'litmus test' bill Biden can build on Pope Francis's visit to Iraq The Hill's Morning Report - Presented by Facebook - House boots Greene from committees; Senate plows ahead on budget MORE (N.J.). Reps. Henry Cuellar (Texas) and Collin PetersonCollin Clark PetersonSix ways to visualize a divided America On The Trail: The political losers of 2020 OVERNIGHT ENERGY: Trump admin to sell oil leases at Arctic wildlife refuge before Biden takes office |Trump administration approves controversial oil testing method in Gulf of Mexico | Rep. Scott wins House Agriculture Committee gavel MORE (Minn.) were the only Democrats to vote "no."