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. JohnsonProgressives urge Democrats to hear from federal judge deeply critical of Roberts, conservatives House approves bill banning flavored tobacco products Clinton advises checking your voter registration during Trump's State of the Union 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.

ADVERTISEMENT

“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. 

ADVERTISEMENT

“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 CollinsSunday shows preview: As coronavirus spreads in the U.S., officials from each sector of public life weigh in Justice IG pours fuel on looming fight over FISA court Loeffler traded .4M in stocks as Congress responded to coronavirus pandemic 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) Gaetz2020 on my mind: Democrats have to think like Mitch McConnell Harris knocks Gaetz for taking issue with money for Howard in relief package Critics hit Florida governor over lack of 'sweeping' coronavirus response MORE (Fla.) and Chris SmithChristopher (Chris) Henry SmithLawmakers propose waiving travel fees for coronavirus evacuations abroad Cheese, wine importers reeling from Trump trade fight House approves pro-union labor bill MORE (N.J.). Reps. Henry Cuellar (Texas) and Collin PetersonCollin Clark PetersonSNAP, airlines among final hurdles to coronavirus stimulus deal Pelosi: House 'not prepared' to vote remotely on coronavirus relief bill Lone Democrat to oppose impeachment will seek reelection MORE (Minn.) were the only Democrats to vote "no."