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Recently, the Senate Judiciary Committee held a hearing titled “The Federal Arbitration Act and Access to Justice: Will Recent Supreme Court Decisions Undermine the Rights of Consumers, Workers, and Small Businesses?”
So, will recent U.S. Supreme Court decisions undermine the rights of consumers, workers and small businesses? The answer is a resounding yes.
In fact, the court’s rulings already have begun to have an impact. Thousands of consumer and employment disputes with corporations have and will be dismissed and disregarded because of language buried in the fine print of take-it-or-leave-it terms in everyday consumer and employment contracts.
These provisions, called forced arbitration clauses, require consumers and employees to resolve their disputes in secret, costly arbitration proceedings instead of in court. (See a PDF list of selected cases in which forced arbitration clauses and class-action bans were enforced as a result of recent Supreme Court rulings.)
The Senate hearing highlighted a handful of recent harmful Supreme Court decisions, including AT&T Mobility v. Concepcion and American Express v. Italian Colors. These cases have expanded corporations’ ability to deny consumers their legal remedies. Big businesses can now use forced arbitration clauses to prohibit participation in class actions, even if class actions are the only economically viable way for consumers to pursue their cases.
The evidence has long been clear that forced arbitration is not a legitimate alternative method to resolve disputes, despite what the U.S. Chamber of Commerce and other business entities contend. In practice, forced arbitration is used to squash valid legal claims from ever going forward. As a result, companies are repeatedly let off the hook for egregious and illegal conduct, including discriminatory acts in the workplace, faulty home building, illegal charges and fees on cell phone bills, abusive treatment of the elderly in nursing homes, and other misconduct.