Forced Arbitration Injustice Repeal Act

Floor Speech

BREAK IN TRANSCRIPT

Ms. JACKSON LEE. Mr. Chair, as a senior member of the Judiciary Committee, I rise in strong support of H.R. 1423, the Forced Arbitration Injustice Repeal Act or the FAIR Act.

I support the FAIR Act because it restores the rights of workers and consumers by making forced arbitration between individuals and corporations illegal.

This would allow individuals the choice as to how to pursue their rights against a corporation.

It also means that corporations will know that when they violate the law, they can be held publicly accountable.

I have been a champion of FAIR since 2006 when we were discussing the LaVar Arrington and arbitration process of the National Football League Players Association.

Mr. Arrington was an All-Pro linebacker for the Washington Redskins and the New York Giants in the NFL.

In 2004, the NFLPA agreed to represent LaVar Arrington in the matter and retained a major New York law firm.

I am advised that the law firm did not meet with LaVar Arrington until shortly before his non-injury grievance arbitration was scheduled to be heard.

LaVar Arrington was not impressed with the performance of his legal representatives, and after the hearing called NFLPA President Gene Upshaw to complain.

LaVar Arrington asked Mr. Upshaw, who had hired a major New York firm, how they could be his lawyers if they had not even bothered to meet with him, the client, until shortly before the arbitration.

LaVar Arrington told Gene Upshaw he was going to hire his own attorney who could give him an objective view and did so shortly thereafter.

After LaVar Arrington retained new counsel, the arbitration was adjourned for the purpose of pursuing settlement negotiations.

Through the efforts of new counsel, a settlement was reached and Mr. Carl Poston played an important role in achieving this settlement, including arranging a meeting with Redskins Coach Joe Gibbs to explain LaVar Arrington's feelings concerning the situation.

Coach Gibbs helped prevail on the Redskins to reach an acceptable settlement with LaVar Arrington.

The settlement provided that no one did anything wrong or improper and provided for a new contract for LaVar Arrington under which he could obtain an additional $4.85 million under certain conditions, including the right to void the contract if he made Pro Bowls in the next four years unless the Redskins paid LaVar Arrington an additional $3.25 million.

The settlement agreement provided:

``This Agreement shall not be construed as an admission of liability or a finding of wrongdoing by any party.''

As LaVar Arrington has put it, ``[m]y grievance against the Redskins has been settled on no-fault, win-win resolution.''

In 2006, when faced with the issues of the NFLPA's arbitration procedures, I had the questions of:

(a) whether the arbitration procedures employed by the NFLPA are fair;

(b) whether they ensure a neutral arbitrator;

(c) whether adequate opportunity for judicial review exists; and

(d) whether the procedures comport with the intent underlying the Federal Arbitration Act and, if not, what might be a proper legislative response.

We cannot continue to allow corporations to bury forced arbitration clauses in employee handbooks and smart phone apps.

Notably, the bill also applies to small businesses seeking to protect their rights under federal antitrust laws.

We know it is a one-sided system and that corporations write the clauses to be so rigged so most people give up pursing their rights altogether.

Corporations choose the forced arbitration provider, the rules under which the forced arbitration will take place, the state in which the forced arbitration proceeding will occur, and the payment terms.

Most people do not know about forced arbitration but even those who are aware have no say in the process and, because these clauses apply to most jobs, products, and services, a person has no choice but to live with the total depravation of their rights via forced arbitration or give up the job/product/service altogether.

I would like to acknowledge a victim of forced arbitration.

I have been told we are joined by Alexander Newton, the brother of Andowah Newton from New York.

Andowah Newton is Vice President, Legal Affairs at LVMH Moet Hennessy Louis Vuitton Inc., a multinational luxury goods conglomerate.

For years, Ms. Newton was sexually harassed at work by a colleague.

When she formally reported the harassment, the company demanded she apologize to the harasser for reporting him and the company promoted the harasser.

It also began retaliating against her at work.

Ms. Newton had been forced to sign a mandatory arbitration agreement as part of accepting her offer of employment.

Pursuant to New York's 2018 law prohibiting employment agreements that mandate arbitration of sexual harassment claims, in 2019, Ms. Newton filed her sexual harassment claims in New York state court.

The company has moved to compel arbitration, arguing that the New York law is preempted by federal law and that Ms. Newton should be forced into mandatory confidential arbitration proceedings.

Ms. Newton continues to fight the motion to compel in court.

For Ms. Newton and for all of the victims of forced arbitration, we need to resolve this injustice.

Buried in the fine print of everything from nursing home admissions forms and credit card ``agreements,'' to online click-through ``terms and conditions'' and employee handbooks, forced arbitration enables corporations to evade responsibility and avoid accountability.

Forced arbitration means that when a corporation violates the rights of their workers or consumers, they cannot enforce their rights.

Forced arbitration lets corporations funnel aggrieved workers and consumers into a private and secret system which is designed by the corporation to be so rigged that most people are forced to give up their rights altogether.

We know that because corporations know that most individuals will simply give up when faced with a forced arbitration, there is virtually no incentive for corporations to follow the law, or to quickly and fairly handle consumer or worker claims.

The FAIR Act would restore the rights of workers and consumers by making forced arbitration between individuals and corporations illegal--meaning that individuals will be returned the choice as to how to pursue their rights against a corporation.

The FAIR Act also means that corporations will know that when they violate the law, they can be held publicly accountable, thereby returning to corporations the powerful incentive to follow the law in the first place and to treat people justly and fairly.

Forced arbitration is a private, secretive system without any enforceable standards or legal protections.

There is no public review of decisions to ensure the arbitrator got it right.

Federal law does not even require that arbitrators have any legal training or even follow the law and the entire system is unaccountable to the public.

American heroes fought hard for fundamentally important laws--such as federal antidiscrimination laws and laws to protect servicemembers and their families--but these laws are now unenforceable.

It is time to close the forced arbitration loophole that gives corporations the power to ignore the laws Congress enacted.

The Supreme Court held that corporations are allowed to force individuals into arbitration because the Federal Arbitration Act, which was passed in 1925--wipes out all rights under all other laws unless and until Congress updates that law.

Thus, the FAIR Act simply amends the Federal Arbitration Act to make clear that workers and consumers cannot be forced into arbitration against their will.

This prohibition on forced arbitration would apply to all workers (no matter how they are classified by their employer), consumers, and small businesses seeking to enforce their rights under antitrust laws.

I urge my colleagues to join me in supporting H.R. 1423, the ``Forced Arbitration Injustice Act.''

BREAK IN TRANSCRIPT

Source