Archive for November, 2012

"AT&T v. Concepcion"

Flickr photo by OZinOH

The U.S. Supreme Court may be about to take a bad situation for consumers and make it worse. In a case it recently agreed to hear called American Express Co. v. Italian Colors Restaurant, the court will again decide to what extent corporations can force consumers to sign away their right to access the courts. The decision will impact whether consumers will be able to go to court to enforce federal laws meant to protect them.

Under binding mandatory, or “forced” arbitration – the language in many employment and consumer contracts (think cell phone, credit card, checking account, e-commerce and cable contracts, to name a few) requiring consumers to resolve disputes in arbitration proceedings instead of in court – consumers are steered into a private, corporate-run system that lacks oversight and where none of the safeguards of our court system are guaranteed.

Forced arbitration has become a recurring topic at the High Court, and the pro-arbitration decisions have reinforced corporate power while diminishing consumers’ legal rights. Specifically, the court has expanded the meaning of a federal law, the Federal Arbitration Act (FAA), to broadly permit forced arbitration and restrict consumers’ and employees’ ability to sue a company for wrongdoing, individually or in a class action.

A recent decision, for example, was a severe blow to consumer rights. In AT&T Mobility v. Concepcion, the Supreme Court permitted businesses to include language in their consumer and employment contracts that would force consumers to resolve disputes with the respective business in individualized arbitration. Businesses could ban class actions. According to the court, the FAA trumped principles of California law that effectively had prohibited most bans on class actions in contracts.

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A construction site sign that reads, "Danger. Construction Site. No Trespassing."

Flickr photo by Fousty

Construction has been reported historically as one of the most dangerous occupations in the United States by the Occupational Safety and Health Administration (OSHA) . Fatalities and injuries in construction are disproportionately high compared to other industries. For example, out of 4,114 worker fatalities in private industry in 2011, 721, or 17.5 percent, were in construction.

The leading causes of worker deaths on construction sites were falls, electrocution, being struck by an object, and being caught in or between an object. These “Fatal Four” were responsible for 57 percent of construction worker deaths in 2011. Eliminating the Fatal Four would save the lives of 410 American workers every single year.

However, despite the obvious need, OSHA has been slow to address construction hazards. The rule-making process now exceeds six years on average (PDF).

Regarding these circumstances, a frustrated Rep. George Miller (D-Calif.) said, “Rather than adding more bureaucracy to the process like some are proposing, Congress should be working to modernize worker protection laws so that safety officials can reasonably and effectively respond to workplace dangers with the urgency those dangers deserve.”

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a photo of Rick ClaypoolAll-too-often, federal workers who call out corruption in their workplace have been marginalized, penalized and even fired after drawing attention to corporate cronyism and other shady practices.

But, thanks in no small part to tens of thousands of Public Citizen supporters who contacted their members of Congress and urged them to pass the bill, the thirteen-year battle for increased whistleblower protections has finally paid off.

The bill unanimously passed both houses of Congress, and President Obama on Tuesday signed the Whistleblower Protection Enhancement Act (S. 743) into law.

The law will provide federal civil employees with important protections, including extending the current law’s protection beyond the first person who discloses fraud and/or abuse and overriding the U.S. Supreme Court Garcetti v. Ceballos decision, which held that public employees have no First Amendment protection for speech communicated as part of their job duties.

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"Christine Hines"Pew Charitable Trusts released a new survey on the prevalence of binding mandatory (or “forced”) arbitration in consumer checking account contracts. As we’ve long expressed, forced arbitration is a widely practiced phenomenon that requires customers to resolve disputes with their banks in a private corporate-run proceeding, instead of in court.

Among its highlights, the Pew survey found that:

⦁ More than half of the checking account agreements examined contain clauses forcing the consumer to surrender the right to a jury trial.

⦁ 88 percent of consumers, regardless of demographics and political affiliation, find the majority of components of arbitration unacceptable.

⦁ 75 percent of financial institution contracts that include arbitration clauses also include class action bans.

⦁ The 50 largest financial institutions (56 percent of those examined) are more likely to use forced arbitration.

⦁ 64 percent of the financial institutions studied had some form of forced arbitration, class action bans, trial waivers, limits on damages and/or a shortened time period in which a claimant to sue. These practices restrict the ability of consumers to resolve disputes.

The survey shows that forced arbitration has permeated checking account contracts. Not only do banks force their customers into a corporate-run system that lacks oversight, but most of them also deny their customers the right to band together in class actions — a surefire ‘get out of jail free card’ for corporate misconduct.

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Public Citizen applauds today’s decision by the U.S. Environmental Protection Agency (EPA) to temporarily block BP PLC from receiving new federal contracts. The agency, which noted in a press release the company’s lack of b"Tyson Slocum" "Public Citizen"usiness integrity, has taken exactly the right step. We additionally applaud the Department of Interior’s indications, in press reports, that it will block BP from new oil and natural gas leases on federal lands.

BP’s recent felony guilty pleas for the deaths of 11 people and the dumping of 5 million barrels of oil into the Gulf of Mexico demanded such an action. The EPA hasn’t released details of the decision, but we believe the following criteria should be part of the debarment order

  • The EPA has defined the debarment period as “temporary,” saying it will last until the company can show that it meets federal business standards. The debarment period must be for the duration of the five-year probation the company received when it pled guilty to criminal violations. Reconsideration of debarment should not occur until after the five-year probation period has concluded.
  • The debarment must include all BP subsidiaries.
  • While EPA debarment is effective government-wide, individual agencies can request and receive waivers from the debarment order. We urge that no agency – including the Department of Defense – seek or obtain such a waiver.
  • If another violation of federal law or regulation occurs during the debarment and probation period, the debarment should become permanent.

Note: our featured action. Thanks to our activists for their outreach on this issue.

Tyson Slocum is Public Citizen’s energy program director.  You can follow him on Twitter @TysonSlocum.

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