Forced Arbitration

Floor Speech

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Ms. LINDA T. SANCHEZ of California. Mr. Speaker, I thank Mr. Johnson.

I rise today to join Mr. Johnson and Mr. Cartwright in bringing attention to the very unfair and deplorable practice of forcing people into arbitration.

In practice, what this consists of is generally those with more power, meaning very wealthy corporations, including confusing but legally binding language buried in the fine print of contracts, contracts that pretty much purveyed every aspect of our lives. This creates this insidious process in which people, in order to get a credit card or a cell phone or to put a loved one into a nursing home, have to accept the terms of this contract without really knowing what they are buying into.

I want to start by saying that the concept of arbitration is a great one. I strongly support the principles of arbitration and the arbitration process because arbitration can do many good things. It can clear court dockets, it can help provide a more swift resolution to a problem, and it can also reduce legal fees. Those are the benefits of a fair arbitration process. In many ways arbitration can be a great thing.

But--and this is the thing--people think that arbitration is this wonderful process. But what they don't realize is that buried in that fine print in forced arbitration, there can also be terms that limit the evidence that you can introduce. If you are forced into arbitration, there can be limits on the damages that you can claim. It can exclude your ability to request a jury trial. And mandatory binding arbitration has to be entered willingly by both parties, not just the party with the greater economic power. But, in fact, they know that they hold that leverage over the average consumer so they put this kind of limiting language into these arbitration clauses all the time.

Many retailers, banks, and online services have forced arbitration clauses written into their contracts. These arbitration agreements can be forced on vulnerable parties who have little knowledge about what they are signing or what it means to sign away those rights. Frankly, most consumers have little or no choice in the matter because the contracts are ``take it or leave it.''

Why does this hit so close to home?

My father has Alzheimer's, and at a certain point, he could not care for himself anymore, so we had to investigate nursing homes that could provide the kind of around-the-clock care that was required for him that my brothers and sisters and I simply could not.

Sadly, in the nursing home arena, this is where, oftentimes, mandatory--forced--arbitration clauses are buried in these contracts for the admission of your loved one. Loved ones who cannot care for somebody who is physically ill or frail, again, have no real choice in the matter. They need to find facilities to care for their loved ones because they, simply, cannot do it on their own.

That is why, in Congresses past, I introduced the Fairness in Nursing Home Arbitration Act. That legislation would make predispute mandatory arbitration clauses in long-term care contracts unenforceable, and it would restore residents and their families their full legal rights.

What the legislation would do is say that you cannot force arbitration onto families who, in an emotional time and in a medical crisis, are looking for care for their loved ones. You cannot force them to sign something that they don't agree with or even understand. My bill would have allowed families and residents to have maintained their peace of mind as they looked for the best long-term care facilities for their loved ones.

For desperate families who are unable to provide the adequate care at home, the need for an immediate placement for their loved ones makes these contracts, basically, take it or leave it, which gives them no choice at all in the matter. Families who are in the midst of these painful decisions to place a parent or a loved one in a nursing home rarely have the time or the wherewithal to fully and thoughtfully consider what it is they are signing when they sign a contract that contains a mandatory arbitration clause. They are not in a position to adequately determine what agreeing to such a clause will mean for their loved ones should the unthinkable happen.

The Centers for Medicare & Medicaid Services, CMS, is slowly working to include some of my bill's provisions through the regulatory process, but much work still remains in this area. In September of last year, Democrats sent a letter to CMS and called for a final rule that will ensure that nursing home residents will only enter into arbitration agreements on a voluntary and enforced basis after a dispute arises, not before.

We need commonsense solutions to forced arbitration agreements, solutions that would protect the average consumer, who is unfamiliar with the concept of arbitration and is not trained in the law. Many people may not even be aware of the rights they are signing away at a time when they are least prepared to make important decisions. As Members of Congress, we are called on to serve our constituents and to protect them from flagrant violations of their rights. We should be doing more to protect vulnerable families from these forced arbitration policies.

I thank my colleague, Mr. Johnson, for being such a strong voice on this issue.

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