Trial Magazine

Sen. Al Franken (D-Minn.) and Rep. Henry “Hank” Johnson (D-Ga.), the main sponsors of the Arbitration Fairness Act, have been leading the charge against forced arbitration for years. They spoke to Trial about why this secretive practice must end and what the 115th Congress has in store.

Why are you so personally committed to ending forced arbitration?

Johnson: I was a criminal defense lawyer for 27 years, so I’m steeped in a healthy respect for the courtroom and what ¬lawyers do to enforce the law. I know how important the legal process is to individuals. The rule of law is applied in court, with trial by jury. When you replace the judicial process with forced arbitration and remove the body of law and jurisprudence under which a decision can be made, you are discarding that for a private, for-profit, anything-goes type of system. The little guy does not win in that situation. Large corporate interests win because the deck is stacked in their favor. Because I represented people, it’s not hard for me to understand how they are adversely affected when the courthouse door is slammed shut.

Franken: I started fighting forced arbitration almost immediately after I entered the Senate. It quickly became apparent to me that these clauses, which are buried in the fine print of everyday consumer and employment contracts, were transforming our civil justice system and immunizing powerful corporations from accountability.

Alan Carlson, the owner and chef of Italian Colors Restaurant, put it really well in his testimony before a hearing I held in the Senate Judiciary Committee: “In America, I thought we all had the right to pursue justice in court, but it turns out that big business gets to write its own rules.” Our Constitution is supposed to ensure that no entity is too big or too powerful to be held accountable in a court of law.

Editor’s note: Italian Colors’ contract with American Express required forced individual arbitration, which prevented the restaurant from banding together with other merchants in a class action to fight excessive credit card fees and enforce federal antitrust laws. American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013).

After years of introducing legislation, holding hearings, and raising public awareness about forced arbitration, for the first time, federal regulators at the Consumer Financial Protection Bureau, Centers for Medicare and Medicaid Services, Department of Education, and elsewhere are taking action. Do you think the tide is finally turning against forced arbitration?

Franken: Definitely. It’s a very exciting time to be involved in the fight against forced arbitration, and I think the media and public attention on the issue has helped a lot. In November 2015, The New York Times unveiled a three-part investigative series on forced arbitration and demonstrated for a wide audience what I have been saying for a long time—forced arbitration agreements severely restrict Americans’ access to justice by stripping consumers of their legal rights and insulating powerful corporations from liability. And since then, we’ve seen the executive branch further its efforts to address the issue, and a growing number of lawmakers and public figures have spoken out about it as well.

Johnson: I believe the agency actions are based on empirical data that shows forced arbitration is bad for consumers. Studies have been conducted, and the facts have been established. The caustic impact of forced arbitration will force policymakers such as myself to take action or support action that protects people’s rights.

AAJ has led the fight to bring forced arbitration to the forefront. It’s forcing public awareness, and there is now bipartisan anger about what is happening in America, with power and wealth being shifted to the top of the food chain at the expense of consumers and others. It’s causing people to act beyond their party affiliations.

As the public becomes more aware about how harmful this practice is, they will clamor for their representatives to support measures that protect their rights. The process has already started, the data continues to accrue, and there are more real-life examples of people being hurt. It’s reaching a critical mass that will force Congress to act.

What about our next president?

Johnson: If President-elect Trump lives up to his campaign promises to level the playing field for the little guy and end rigged systems, he should strongly support efforts to prohibit forced arbitration. If he truly supports small business, workers, and everyday Americans, he should stand up to Wall Street banks and powerful corporations to prohibit their use of forced arbitration.

Franken: As president, Donald Trump’s most important job will be to work on behalf of every American, which means he should be pursuing policies that support American consumers and workers. I hope to see the Trump administration call for proposals that align with our efforts to crack down on forced arbitration. But if they don’t, I will staunchly oppose any attempt to erode our rights and stack the deck against middle-class Americans, who should be able to seek justice after being wronged.

You’ve introduced legislation that would eliminate forced arbitration clauses in employment, consumer, and civil rights cases, but you were unable to gain enough bipartisan support to send anything to President Obama’s desk. Do you think the 115th Congress holds better prospects?

Johnson: I believe that as long as Republicans control the House of Representatives, I see no prospects for the Arbitration Fairness Act to see the light of day. The fact is that my friends on the other side of the aisle support big business, and big business supports forced arbitration.

Franken: Those of us who care about forced arbitration are thinking carefully about how we build on the advances of the last year in the next Congress. I’m hoping we will be able to find areas of common ground going forward.

Sen. Franken, Wells Fargo is being investigated for allegedly engaging in widespread fraud, where employees opened millions of fake customer accounts. Court documents show that its lawyers knew what was transpiring for years, as they were filing motions to compel arbitration against customers, employees, and whistleblowers who were making these allegations. How do you think the secretive nature of forced arbitration impacts consumers and workers?

Franken: This case is a perfect example of how forced arbitration shields powerful companies from accountability—both from the courts and the public eye. Because the arbitration proceedings in this case were kept secret, other customers who had been wronged were left in the dark and were unable to mitigate the effects of Wells Fargo’s wrongdoing.

The privatization of the American justice system also severely endangers our rule of law. As lawmakers, we’ve fought hard to pass legislation to protect Americans from discrimination. This critical work is undermined, however, if we strip away their right to go to court and instead force these claims into a privatized justice system where no traditional checks are in place to ensure such laws are being enforced fairly.