Consumers No Longer Forced to Sign Away Their Rights Under Arbitration Fairness Act

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Consumers No Longer Forced to Sign Away Their Rights Under Arbitration Fairness Act 

For Immediate Release: February 12, 2009

Contact: Ray De Lorenzi
202.965.3500 ext. 8369

Consumers No Longer Forced to Sign Away Their Rights Under Arbitration Fairness Act

Bipartisan bill will protect Americans like Jamie Leigh Jones, John Donahue from abusive corporate practices

Washington, DC – Countless Americans will no longer be forced to give up their legal rights and enter unfair arbitration agreements under bipartisan legislation introduced today in the U.S. House.

Mandatory binding arbitration clauses are hidden in the fine print of everything from cell phone, credit cards, franchise and employment agreements to nursing home care contracts.  These clauses force consumers or employees to give up their right to take their case to court in the event there is a dispute with the corporation. 

The bipartisan Arbitration Fairness Act of 2009 (H.R. 1020), introduced by Rep. Hank Johnson (D-GA), will ensure that the decision to arbitrate be made voluntarily and after the dispute has arisen, so corporations cannot manipulate the arbitration system in their favor at the expense of consumers.

“The Arbitration Fairness Act will prevent negligent corporations from stacking the deck against consumers who unknowingly sign away their access to justice,” said American Association for Justice President Les Weisbrod.  “Arbitration can only be an effective means to resolve disputes when both parties agree voluntarily, not when it is forced upon consumers in secret to limit their rights.”

The Arbitration Fairness Act will help people like Jamie Leigh Jones, who was raped, drugged, beaten, and then confined to a shipping container by KBR/Halliburton employees while working in Iraq.  Because of a clause placed in her employment contract, KBR tried to force Ms. Jones to submit to a binding, secret, non-appealable arbitration.  Ms. Jones had to fight to obtain access to the justice system because she unknowingly signed an arbitration clause as part of her 18-page employment contract.

John Donahue was a 93-year-old nursing home resident in Massachusetts.  Because a nurse did not follow standard policy when operating a mechanical lift, he experienced an eye injury so severe that it required removal of his eye, and the infection caused by this injury later killed him.  Once Mr. Donahue’s daughter pursued the case on behalf of her father’s estate, the nursing home presented what it claimed to be a document, which Mr. Donahue, at age 91 and without any family members or any other witnesses present, had supposedly signed.  The nursing home was forcing mandatory binding arbitration on its own terms.

Americans overwhelmingly disprove of mandatory binding arbitration agreements.  When consumers learn that the company picks the arbitrator, they give up their right to take the case to court, and binding arbitration applies even if they are seriously injured, 81 percent disapprove.  The Arbitration Fairness Act also has wide support across party lines with no statistical difference between Democrats (+38) and Republicans (+37).  AAJ’s polling can be found here:  http://www.justice.org/cps/rde/xchg/justice/hs.xsl/4350.htm.

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