[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                     JUSTICE RESTORED: ENDING FORCED
                       ARBITRATION AND PROTECTING
                           FUNDAMENTAL RIGHTS

=======================================================================

                                HEARING

                               BEFORE THE

               SUBCOMMITTEE ON ANTITRUST, COMMERCIAL, AND 
                            ADMINISTRATIVE LAW

                                 OF THE

                       COMMITTEE ON THE JUDICIARY

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             FIRST SESSION

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                      THURSDAY, FEBRUARY 11, 2021

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                            Serial No. 117-2

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         Printed for the use of the Committee on the Judiciary

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


               Available via: http://judiciary.house.gov
               
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
47-471 PDF                 WASHINGTON : 2022                     
          
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                       COMMITTEE ON THE JUDICIARY

                    JERROLD NADLER, New York, Chair
                MADELEINE DEAN, Pennsylvania, Vice-Chair

ZOE LOFGREN, California              JIM JORDAN, Ohio, Ranking Member 
SHEILA JACKSON LEE, Texas            STEVE CHABOT, Ohio
STEVE COHEN, Tennessee               LOUIE GOHMERT, Texas
HENRY C. ``HANK'' JOHNSON, Jr.,      DARREL ISSA, California
    Georgia                          KEN BUCK, Colorado
THEODORE E. DEUTCH, Florida          MATT GAETZ, Florida
KAREN BASS, California               MIKE JOHNSON, Louisiana
HAKEEM S. JEFFRIES, New York         ANDY BIGGS, Arizona
DAVID N. CICILLINE, Rhode Island     TOM McCLINTOCK, California
ERIC SWALWELL, California            W. GREGORY STEUBE, Florida
TED LIEU, California                 TOM TIFFANY, Wisconsin
JAMIE RASKIN, Maryland               THOMAS MASSIE, Kentucky
PRAMILA JAYAPAL, Washington          CHIP ROY, Texas
VAL BUTLER DEMINGS, Florida          DAN BISHOP, North Carolina
J. LUIS CORREA, California           MICHELLE FISCHBACH, Minnesota
MARY GAY SCANLON, Pennsylvania,      VICTORIA SPARTZ, Indiana
SYLVIA R. GARCIA, Texas              SCOTT FITZGERALD, Wisconsin
JOE NEGUSE, Colorado                 CLIFF BENTZ, Oregon
LUCY McBATH, Georgia                 BURGESS OWENS, Utah
GREG STANTON, Arizona
VERONICA ESCOBAR, Texas
MONDAIRE JONES, New York
DEBORAH ROSS, North Carolina
CORI BUSH, Missouri

        PERRY APELBAUM, Majority Staff Director & Chief Counsel
               CHRISTOPHER HIXON, Minority Staff Director
                                 ------                                

                 SUBCOMMITTEE ON ANTITRUST, COMMERCIAL,
                         AND ADMINISTRATIVE LAW

                DAVID N. CICILLINE, Rhode Island, Chair
                PRAMILIA JAYAPAL, Washington, Vice-Chair

JOE NEGUSE, Colorado                 KEN BUCK, Colorado, Ranking Member
ERIC SWALWELL, California            DARREL ISSA, California
MONDAIRE JONES, New York             MATT GAETZ, Florida
THEODORE E. DEUTCH, Florida          MIKE JOHNSON, Louisiana
HAKEEM S. JEFFRIES, New York         W. GREGORY STEUBE, Florida
JAMIE RASKIN, Maryland               MICHELLE FISCHBACH, Minnesota
VAL BUTLER DEMINGS, Florida          VICTORIA SPARTZ, Indiana
MARY GAY SCANLON, Pennsylvania       SCOTT FITZGERALD, Wisconsin
LUCY McBATH, Georgia                 CLIFF BENTZ, Oregon
MADELINE DEAN, Pennsylvania          BURGESS OWENS, Utah
HENRY C. ``HANK'' JOHNSON, Jr., 
    Georgia

                       SLADE BOND, Chief Counsel
                      DOUG GEHO, Minority Counsel
                            
                            
                            C O N T E N T S

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                      Thursday, February 11, 2021

                                                                   Page

                           OPENING STATEMENTS

The Honorable Henry ``Hank'' Johnson, Jr., a Member of the 
  Subcommittee on Antitrust, Commercial, and Administrative Law 
  from the State of Georgia......................................     2
The Honorable Ken Buck, Ranking Member of the Subcommittee on 
  Antitrust, Commercial, and Administrative Law from the State of 
  Colorado.......................................................     3
The Honorable Jerrold Nadler, Chair of the Committee on the 
  Judiciary from the State of New York...........................     4

                               WITNESSES

Myriam Gilles, Paul R. Verkuil Chair in Public Law, Benjamin N. 
  Cardozo School of Law
  Oral Testimony.................................................    18
  Prepared Testimony.............................................    20
Gretchen Carlson, Journalist and Advocate
  Oral Testimony.................................................    33
  Prepared Testimony.............................................    35
Jacob Weiss, Founder and President, OJ Commerce
  Oral Testimony.................................................    39
  Prepared Testimony.............................................    41
G. Roger King, Senior Labor and Employment Counsel, The HR Policy 
  Association
  Oral Testimony.................................................    46
  Prepared Testimony.............................................    48

          LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING

Materials submitted by the Honorable Henry ``Hank'' Johnson, Jr., 
  a Member of the Subcommittee on Antitrust, Commercial, and 
  Administrative Law from the State of Georgia for the record
  Statement from the Honorable David N. Cicilline, Chair of the 
    Subcommittee on Antitrust, Commercial, and Administrative Law 
    from the State of Rhode Island...............................    10
  Statement from the Honorable Joe Neguse, a Member of the 
    Subcommittee on Antitrust, Commercial, and Administrative Law    16
  Statement from Valerie Haney, a former member of the Church of 
    Scientology..................................................   278
  Statement from Tanuja Gupta, Googlers for Ending Forced 
    Arbitration..................................................   282
  Statement from Remington A. Gregg, Counsel for Civil Justice 
    and Consumer Rights, Public Citizen..........................   288
  Statement from Wade Henderson, Interim President and CEO, and 
    LaShawn Warren, Executive Vice President for Government 
    Affairs, The Leadership Conference on Civil and Human Rights.   296
  Statement from Heidi Silton, President, Committee to Support 
    the Antitrust Laws (COSAL)...................................   299
  Statement from Chrissie Carnell-Bixler, former member of the 
    Church of Scientology........................................   300
  A letter from George P. Slover, Senior Policy Counsel, and Syed 
    Ejaz, Policy Analyst, Consumer Reports.......................   303
  A Plantiff Brief in the case of Newton v. Hennessy Louis Vuitto 
    from George P. Slover, Senior Policy Counsel, and Syed Ejaz, 
    Policy Analyst...............................................   306

                                APPENDIX

Materials submitted by the Honorable David N. Cicilline, Chair of 
  the Subcommittee on Antitrust, Commercial, and Administrative 
  Law from the State of Rhode Island for the record
  Statement from Laura M. Flegal, Legislative & Public Policy 
    Director, The Employee Rights Advocacy Institute for Law & 
    Policy.......................................................   366
  Statement from Richard Hunt, President and CEO, Consumer 
    Bankers Association..........................................   373
  Statement from Eric P. Tuchmann, Senior Vice President, General 
    Counsel, and Corporate Secretary, American Arbitration 
    Association..................................................   375
  Statement from 83 consumer and civil rights organizations 
    supporting the FAIR Act......................................   381

                 RESPONSES TO QUESTIONS FOR THE RECORD

Responses to questions by Myriam Gilles, Paul R. Verkuil Research 
  Chair in Public Law, Benjamin N. Cardozo School of Law, from 
  the Honorable Mary Gay Scanlon, a Member of the Subcommittee on 
  Antitrust, Commercial, and Administrative Law from the State of 
  Pennsylvania for the record....................................   388
Responses to questions by Jacob Weiss, Founder and President, OJ 
  Commerce, from the Honorable Mary Gay Scanlon, a Member of the 
  Subcommittee on Antitrust, Commercial, and Administrative Law 
  from the State of Pennsylvania for the record..................   390

 
                    JUSTICE RESTORED: ENDING FORCED
                       ARBITRATION AND PROTECTING
                           FUNDAMENTAL RIGHTS

                              ----------                              


                      Thursday, February 11, 2021

                        House of Representatives

               Subcommittee on Antitrust, Commercial, and

                           Administrative Law

                       Committee on the Judiciary

                             Washington, DC

    The Subcommittee met, pursuant to call, at 10:00 a.m., in 
Room 2141, Rayburn House Office Building, Hon. Henry ``Hank'' 
Johnson Jr. of Georgia presiding.
    Present: Representatives Nadler, Neguse, Jones, Deutch, 
Jeffries, Jayapal, Demings, Scanlon, McBath, Johnson of 
Georgia, Buck, Issa, Johnson of Louisiana, Steube, Bishop, 
Fischbach, Spartz, Fitzgerald, Bentz and Owens.
    Staff Present: Madeline Strasser, Chief Clerk; John 
Williams, Parliamentarian; Amanda Lewis, Counsel; Joseph Van 
Wye, Professional Staff Member; Slade Bond, Chief Counsel; 
Phillip Berenbroick, Counsel; Doublas Geho, Minority Chief 
Counsel for Administrative Law; Kiley Bidelman, Minority Clerk.
    Mr. Johnson of Georgia. The Subcommittee will come to 
order.
    Without objection, the Chair is authorized to declare 
recesses of the Committee at any time.
    Good morning, and welcome to today's hearing on the impact 
of forced arbitration on the fundamental rights of hardworking 
Americans and our system of laws. Before we begin, I would like 
to remind the Members that we have established an email address 
and distribution list dedicated to circulating exhibits, 
motions, or other written materials that Members might want to 
offer as a part of today's hearing. If you would like to submit 
materials, please send them to the email address that has been 
previously distributed to your offices, and we will circulate 
the materials to the Members and staff as quickly as we can.
    I would also remind all Members that guidance from the 
Office of Attending Physician states that face coverings are 
required for all meetings in an enclosed space, such as 
Committee hearings. I expect all Members on both sides of the 
aisle to wear a mask for the duration of today's hearing.
    I now recognize myself for an opening statement. I want to 
thank the esteemed Witnesses for agreeing to offer testimony at 
this important hearing today.
    I would also like to extend a sincere thanks to Chair David 
Cicilline for allowing me the honor of chairing this hearing in 
his absence, as he is disposed as an impeachment manager now in 
trial in the Senate. This was to be Chair Cicilline's first 
Subcommittee hearing of this new Congress, and its subject 
happened to concern the issue of forced arbitration, which is 
an issue that I have championed since I have first came to 
Congress back in 2007. So, I am particularly honored to Chair 
this hearing in his absence.
    Forced arbitration is an underhanded maneuver that 
corporations use to trick consumers, workers, and small 
businesses out of their right to go to court and seek damages 
from a jury of their peers when they get injured or cheated. 
From consumer purchases to nursing home contracts for the 
elderly, and even when you accept a job offer, corporations use 
small print to put arbitration clauses into the paperwork that 
you sign. Without ever knowing it, you have signed away your 
right to seek justice in court. Instead, you have been tricked 
into a secret, for-profit dispute resolution process known as 
binding arbitration.
    In forced arbitration, the deck is stacked against the 
little guy, and most often the corporation comes out on top. 
Consumers, workers, and small-business people shouldn't need a 
law degree to be able to go about their daily lives without 
giving up their constitutional rights. That is exactly what is 
happening in our society today.
    Every day when you are trying to get a job, or you want to 
purchase a car, or even to buy a TV online, you find yourself 
pitted against a multimillion-dollar corporate legal department 
and their 10-page small print contract that forces you to 
choose between foregoing a necessity or signing away your 
Seventh amendment constitutional right to a trial by jury. The 
truth is you really don't have a choice because everywhere you 
go to make a purchase or seek employment, you run right into a 
forced arbitration clause. It has gotten to a point where it is 
a take-it-or-leave-it situation. You can't get a cell phone or 
a credit card or even a job nowadays unless you sign away your 
rights because that is what every corporation requires. They 
force you into binding arbitration because it benefits them, 
and it is at your expense. It is not fair, and it is not right.
    I am also not just talking about traditional pen-and-paper 
contracts. Arbitration clauses are hidden in the terms and 
conditions when you download an app. They are hidden in 
employment paperwork when you get a new job, in packaging for 
all your devices, and in software updates you don't even 
realize you are getting. Forced arbitration clauses have even 
been found enforceable when employees are forced to sign a 
nonnegotiable contract update during their midyear review. If 
you signed an arbitration clause, you no longer have a right to 
take your dispute to court for a trial. Instead, you are forced 
into the secret, for-profit forced arbitration setup where the 
corporation that puts you into the arbitration process also 
chooses where your case will be handled, the judge to hear your 
case, and the law the judge will apply. With a setup like that, 
it is no wonder that most of the time the corporations come out 
on top. If this sounds unfair, well, it is.
    Big businesses that already had all the power in the 
relationship between themselves and someone like you or me 
stacked the deck so that they can avoid the only thing out 
there that could hold them accountable, the United States 
justice system. It is about accountability, or the lack 
thereof. That is why this arbitration issue matters, because 
without accountability, without access to the courthouse, the 
tragic stories of Americans harmed by corporations can never 
become a force for good.
    Class actions can stop banks from defrauding thousands of 
their customers. They can thwart corporations from having a 
culture of sexual abuse of women. Public court cases can close 
nursing homes, perpetrating widespread abuse. Federal judges 
can ensure that laws protecting the jobs of working people are 
obeyed. This balancing of the scales of justice can never 
happen if forced arbitration clauses continue to shield 
corporations from you having your day in court.
    I have been a proud sponsor of the Forced Arbitration 
Injustice Repeal Act, also known as the FAIR Act, which was 
filed today with 155 cosponsors. If it passes, it would secure 
the accountability that is so lacking today by banning the 
enforcement of forced arbitration clauses in consumer, 
antitrust employment, and civil rights disputes.
    Corporations have proven time and again that when given the 
power, they will take more. We need to lay down rules of the 
road to ensure that people going about their daily lives are 
not forced to give up their constitutional rights.
    With that, I would like to welcome the new Members to the 
Subcommittee.
    I now recognize the distinguished gentleman from Colorado, 
Ranking Member Buck, for his opening statement.
    Mr. Buck. Thank you, Mr. Chair. I want to thank you and Mr. 
Cicilline and Mr. Nadler for calling this important hearing.
    There are a number of issues that I think are really 
fascinating and need to be explored, and I am really looking 
forward to hearing the testimony of the Witnesses today.
    The idea that we will do away with arbitration clauses in 
the contracts and not have a serious impact on our judicial 
system is something that we need to explore and probably in a 
separate hearing, since it doesn't appear that these Witnesses 
are necessarily in a position to talk about the impact of that 
kind of change to our judicial system.
    There are some discrete areas, and sexual harassment is one 
of them, that I think needs to really be explored to decide 
whether we take that out of arbitration clauses or not. There 
are so many, literally, millions of contracts that are entered 
into every year that contain arbitration clauses. If we do away 
with those, it would have a serious impact.
    Arbitration is a fair system. It is a system that many, 
many consumers, and others have benefited from the speed that 
arbitration--that the process--how quickly the process occurs. 
Oftentimes, the individuals that are involved, the plaintiffs, 
in the arbitration clauses receive awards, and they don't have 
to pay exorbitant attorney's fees with those awards.
    So, I am particularly interested in hearing Ms. Carlson's 
testimony today.
    As a FOX News viewer and a FOX News participant or guest 
sometimes, I have followed that organization somewhat closely. 
I am really heartened by the fact that they have dealt with a 
very serious problem. They have gotten rid of a number of 
predators, people that I would consider predators in their 
organization. They have tried to clean that organization up, 
and I think have, to a certain extent, really moved forward on 
those issues.
    I am also very proud that I am a big fan of Ms. Carlson's 
and she, with her courage, really changed, not just an 
organization, but the way a number of people in this country 
look at sexual harassment in the workplace.
    So, I am particularly interested in hearing the testimony 
of these Witnesses and how we can balance the needs of dealing 
with certain areas.
    I think one of the things when I read the testimony of the 
Witnesses and some other materials last night, what struck me 
was the difference between doing away with arbitration clauses 
and doing away with the secrecy provisions in contracts. 
Obviously, I think all of us or at least most of us would 
agree, that if there is a predator in the workplace, there 
should not be secrecy, that person should not be staying in the 
workplace. The person should be outed, and people should be 
warned about that kind of behavior for that employer and in 
other areas. That doesn't mean that arbitration by itself is a 
problem. So, I think that those are two issues that I want to 
make sure we distinguish in the employment context of 
arbitration clauses and are able to make a good judgment about 
that.
    I look forward to this testimony and the hearing, and I 
thank the gentleman from Georgia for recognizing me.
    Mr. Johnson of Georgia. I thank you Ranking Member Buck.
    The Chair now recognizes the Chair of the Full Committee, 
the gentleman from New York, Mr. Nadler, for his opening 
statement.
    Chair Nadler. Thank you, Mr. Chair, for holding today's 
important hearing on forced arbitration. Nearly a century ago, 
Congress enacted the Federal Arbitration Act to allow merchants 
to resolve run-of-the-mill contract disputes through a system 
of private arbitration that would be legally enforceable. The 
system that Congress envisioned was to be used voluntarily and 
only between merchants of equal bargaining power.
    Thanks to a series of disastrous Supreme Court decisions, 
however, this system has been turned entirely on its head. 
Private arbitration has been transformed from a voluntary form 
for companies to resolve commercial disputes into a legal 
nightmare for millions of consumers, employees, and others who 
are forced into arbitration and are unable to enforce 
fundamental rights in court. Many companies used forced 
arbitration as a tool to protect themselves from consumers and 
workers who seek to hold them accountable for alleged 
wrongdoing. By burying a forced arbitration clause deep within 
the fine print of take-it-or-leave-it consumer and employment 
contract, companies can effectively evade the court system 
where plaintiffs have far greater legal protections and hide 
behind a one-sided process that is tilted in their favor.
    For example, arbitration generally limits discovery. It 
does not adhere to Rules of Civil Procedure, can prohibit class 
actions, may preclude the right of appeal and the proceedings 
and often the results must they seek it. For millions of other 
small businesses, consumers, and employees, the precondition of 
obtaining a basic service or product, such as a bank account, a 
cell phone, or even a job is that someone must agree to resolve 
any disputes in private arbitration, whether they know it or 
not. That means that their ability to enforce civil rights, 
consumer, employment, and antitrust laws are subject to the 
wins of a private arbitrator, who is not required to provide 
plaintiffs with any of the fundamental protections guaranteed 
in the courts.
    We have bedrock principle in this country, and that is that 
all Americans deserve a day in court. We make a mockery of this 
principle, however, when we allow individuals to be stripped of 
this right and to be forced into private arbitration 
proceedings without the safeguards that our judicial system 
affords. Yet, that is where we find ourselves today.
    This problem began in earnest in the 1980s with a series of 
Supreme Court decisions that misapplied the clear legislative 
intent of Congress and dramatically expanded the ability of 
companies to limit the rights of consumers and workers through 
forced arbitration.
    In 1984, the court granted corporations the right to 
enforce arbitration clauses even when State law rendered them 
null and void. Strikingly, in 1985, the court had allowed 
arbitration proceedings to be used not just to settle contracts 
but also to interpret laws enacted by Congress that implicate 
fundamental rights.
    Most recently, a conservative majority on the Supreme Court 
reached new heights in misreading what Congress intended. In a 
5-4 decision in the Epic Systems case, the court held that 
employers can combine forced arbitration clauses with class 
action bans to prevent workers from banning together to hold 
lawbreaking employers accountable, despite clear authority for 
workers to bring their claims under the National Labor 
Relations Act.
    That is why shortly I will be reintroducing the Restoring 
Justice for Workers Act, legislation that would end forced 
arbitration in employment contracts and would protect workers' 
rights to pursue work-related claims in court.
    Just as Ruth Bader Ginsburg stated in her dissent in Epic 
Systems, ``a congressional correction is urgently in order.'' I 
strongly agree.
    I also strongly support the Forced Arbitration Injustice 
Repeal Act, or FAIR Act, introduced by the gentleman from 
Georgia, Mr. Johnson, which would prohibit forced arbitration 
in consumer, employment, civil rights, and antitrust disputes. 
This legislation passed with overwhelming support last Congress 
by a bipartisan vote of 225-186.
    I applaud Congressman Johnson for his leadership on this 
legislation, and I look forward to passage of this legislation 
again this Congress.
    The widespread use of forced arbitration is serious threat 
to our entire legal system and to the basic tenets of our 
democracy. For many companies, arbitration has been a get-out-
of-jail-free card to circumvent the basic rights of consumers 
and workers.
    It is up to Congress to reverse this dangerous trend, and I 
look forward to hearing from our distinguished panel of 
Witnesses about how best to address this important issue. I 
thank the Chair for holding today's hearing, and I yield back 
the balance of my time.
    Mr. Johnson of Georgia. I thank the gentleman from New 
York.
    With that, it is now my pleasure to introduce today's 
Witnesses. Our first Witness is Professor Myriam Gilles, who 
has been the Paul R. Verkuil Chair in Public Law at the 
Benjamin N. Cardozo School of Law since 2003. Before being 
appointed the Paul Verkuil Chair, Ms. Gilles served as an 
associate professor and lecturer of law at the Benjamin N. 
Cardozo School. Additionally, Ms. Gilles sits on the boards of 
both the Justice Resource Center and Public Justice where she 
is an executive Committee member of the Class Action 
Preservation Project. She received her Bachelor of Arts at 
Harvard College and her law degree at Yale Law School.
    Welcome, Ms. Gilles.
    Our second Witness is Gretchen Carlson, an acclaimed 
journalist, best-selling author, filmmaker, and advocate. Ms. 
Carlson hosted The Real Story and co-hosted Fox & Friends for 
more than 7 years on Fox News. In 2016, Ms. Carlson was forced 
out of Fox after her workplace harassment complaint became 
public and has since focused her energy on advocating for 
important legislative changes to protect sexual assault and 
sexual harassment survivors. She has written two New York Times 
bestsellers and has been recognized by the New York Women in 
Communications, the National Organization for Women, and YWCA 
Greater Los Angeles for her advocacy work. Ms. Carlson is the 
former first Miss America to serve as chair of the 
organization. She received her Bachelor of Arts at Stanford 
University and serves as a national trustee for the March of 
Dimes.
    Welcome back, Ms. Carlson.
    Today's third Witness is Jacob Weiss, the founder and 
President of OJ Commerce. Mr. Weiss has a long career as a 
successful business owner and entrepreneur. In 1998, he founded 
Baby Age.com, a premier online pregnancy and juvenile product 
marketplace that has often been featured on Internet Retailer 
as one of the top 500 internet companies. Most recently, Mr. 
Weiss founded OJ Commerce, a successful online retailer focused 
on selling home and office goods. OJ Commerce does a great deal 
of their business on other platforms, especially Amazon.com.
    When Mr. Weiss had a dispute with Amazon regarding their 
unfair market practices, he learned that buried in the small 
print of his contract was a forced arbitration clause. Mr. 
Weiss has spent years attempting to reach a settlement with 
Amazon through arbitration.
    Welcome, Mr. Weiss.
    Our last Witness at today's hearing is G. Roger King, the 
senior labor and employment counsel at the HR Policy 
Association. He recently retired from the Jones Day law firm 
where he was a partner. Previously, Mr. King served as 
professional staff counsel with the United States Senate Labor 
Committee. Mr. King has extensive experience with labor, 
employment, healthcare contract, Administrative, and collective 
bargaining law. He has represented dozens of clients over the 
course of his career, including the United States Chamber of 
Commerce, the National Manufacturers Association, Verizon, 
General Motors, and Promedica. Mr. King received his 
undergraduate degree from Miami University, and his J.D. from 
Cornell University Law School.
    Welcome, Mr. King.
    We welcome all our distinguished Witnesses, and we thank 
them for their participation. I want to remind our Witnesses 
they have an obligation to provide truthful testimony today and 
that making a false statement to Congress is potentially 
punishable under section 1001 of title 18 of the United States 
Code.
    I will note at this time that I have opening statements 
from Chair of the Subcommittee David Cicilline, along with a 
Member of the Subcommittee Congressman Joe Neguse, who along 
with David Cicilline are impeachment managers--or is an 
impeachment manager--and they are working on trial before the 
Senate right now. I have their statements for entry into the 
record without objection.
    Hearing none, the documents are admitted.
    [The information follows:]
     

                 MR. JOHNSON OF GEORGIA FOR THE RECORD

=======================================================================

[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Mr. Johnson of Georgia. Please note, Witnesses, that your 
written statements will be entered into the record in their 
entirety.
    Accordingly, I ask that you summarize your testimony in 5 
minutes. To help you stay within that timeframe, there is a 
timing light in WebEx. When the light switches from green to 
yellow, you will have one minute to conclude your testimony. 
When the light turns to red, it signals that your 5 minutes 
have expired.
    I would also note that Mr. Weiss' counsel is participating 
in the WebEx platform today pursuant to section G of the House 
Rules Committee's remote Committee proceedings regulations.
    I now recognize Professor Gilles for 5 minutes.

                   STATEMENT OF MYRIAM GILLES

    Ms. Gilles. Chair Nadler, Chair Johnson, Ranking Member 
Buck, distinguished Members of the Subcommittee, thank you for 
inviting me back to address this important issue. It is a 
privilege to come before you. In my few minutes, I would like 
to briefly explain how forced arbitration clauses strip us of 
our legal rights.
    Forced arbitration clauses are, as many of the opening 
statements have already described, these are provisions buried 
in the fine print of take-it-or-leave-it contracts that require 
all disputes to be resolved in private one-on-one arbitrations. 
What this really means is that if a company rips off its 
customers or employees, those customers or employees are 
essentially powerless to do anything about it. They can't go to 
court. They can't ban together to bring a class action. They 
can't even proceed as a group in arbitration. The only thing an 
individual can do is take on all the costs and time of going 
against the company one on one, which, let's be honest, most 
rational people simply won't do. The data shows this quite 
clearly.
    For example, one study estimated that 98 percent of workers 
who suffer harm in the workplace abandon their claims rather 
than file individual arbitrations. What this reveals, I think, 
is that forced arbitration clauses do not encourage workers to 
bring claims but only serves squelch those claims.
    As such, these provisions have allowed companies to 
immunize themselves accepts from all forms of legal 
accountability by simply adding some magic words to their 
contracts, their standard form contracts, click wrap 
agreements, envelope stuffers, all methods of conveyance 
designed to obscure or minimize the immensity of the rights 
that are being forfeited.
    Not surprisingly, study after study has also shown that 
workers, veterans, consumers, and small business owners often 
have no idea they entered into contracts that deprive them of 
the right to go to court before a jury of their peers.
    Given this reality, it won't surprise you that over the 
past decade, class-banning forced arbitration clauses have 
become so commonplace that it is impossible to find a product, 
a service, an amenity of modern life that doesn't require us to 
first sign away our rights--rights under consumer, employment, 
civil rights, antitrust statutes, rights that this Congress and 
your State counterparts enacted to protect American citizens.
    Now, to give you a sense of just how enthusiastically 
companies have embraced forced arbitration in an employment, 
over 60 million American workers are currently subject to 
forced arbitration. That is more than half the nonunionized 
workforce. Economists predicts that by 2024, 80 percent of 
workers will be bound to these provisions.
    I just want to stop there for a moment to really think 
about this: Eighty percent of all workers will not have the 
right to resolve claims for sexual harassment, racial 
discrimination, wage theft, and wrongful termination. Eighty 
percent of employers simply declining to be bound by Federal 
and State workplace protection laws.
    Worse yet, and I think this is also important, the costs of 
forced arbitration are disproportionately born by low-wage 
workers and those critical frontline jobs, such as education 
and healthcare, that are largely comprised of women and African 
Americans.
    In consumer transactions, probably every single person on 
this call, in this country is subject to a forced arbitration 
clause in some aspect of their consumer lives. To use a credit 
card, open a checking account, get a loan, join a gym, send 
your kid to camp, put your mom in a nursing home, you have to 
first sign away your rights to seek legal redress for 
violations of privacy, product liability, data breaches, fraud, 
illegal trading activity, and more.
    Despite what the Chamber of Commerce, or Mr. King, the next 
Witness, may tell you, forcing arbitration on an unknowing 
public is not about achieving fair, expeditious, or cost-
effective resolutions. It is about suppressing legal claims all 
together. Well, you don't have to take my word for it, you can 
just look at the actions of companies like Chipotle, Uber, and 
DoorDash, these companies impose class-banning forced 
arbitration clauses on their workers.
    When thousands of workers actually tried to bring single-
file individual arbitrations, these companies bulked at the 
time and expense of honoring their own contracts. Then they 
tried to do everything they could to escape arbitration, 
including going to court to argue that worker claims should 
actually be brought as a class action. This is the very thing, 
of course, that air contracts prohibit. The hypocrisy here is 
incredible--
    Mr. Johnson of Georgia. Ms. Gilles, if you would wrap up. 
You are beyond your 5 minutes.
    Ms. Gilles. Oh, I am so sorry. I will just wrap up by 
saying that it is abundantly clear the Federal legislation is 
needed to halt this worsening situation. I am happy to answer 
any questions I can. Thank you so much for your time.
    [The statement of Ms. Gilles follows:]
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    Mr. Johnson of Georgia. Thank you. Welcome back to the 
Committee Ms. Gilles.
    Next, we will hear from Ms. Carlson. Ms. Carlson, you may 
begin. You are recognized for 5 minutes.

                 STATEMENT OF GRETCHEN CARLSON

    Ms. Carlson. Chair Cicilline, Chair Johnson, Ranking Member 
Buck, other distinguished Members of the Committee, thank you 
so much for providing me the opportunity to be back in front of 
this Committee to testify about my experience with forced 
arbitration.
    Four and a half years ago, on July 6th, 2016, I jumped off 
the cliff all by myself, and I sued my boss, former FOX News 
chairman and CEO Roger Ailes, for sexual harassment. It was the 
biggest decision of my life. Once public, the story ran like 
wildfire all around the world. Back then, I could have never 
imagined my story would help ignite the #MeToo movement and 
that I would become one of the prominent faces fighting against 
forced arbitration in the workplace. Here is what I found out: 
Courage is contagious, and the cultural revolution we are still 
experiencing is long overdue.
    The first step for me was telling the truth. The next step 
was to passionately work to change the system for all women and 
men across our country. So, I spent much of the last 4 years 
walking the halls of Congress, encouraging legislators to take 
real meaningful action to help workplace harassment victims, to 
take the issue out of the shadows of secrecy. In December 2017, 
I proudly joined legislators from both parties, Congresswoman 
Bustos and Stefanik and Senators Gillibrand and Graham to 
introduce the Ending Forced Arbitration of Sexual Harassment 
Act. In February 2019, the bill was reintroduced in the House.
    Here we are again with a new Congress, and here I am again 
talking about my bill in forced arbitration because, quite 
honestly, I truly believe that this legislation will change the 
landscape of the American workplace, retaining women and people 
of color while at the same time making it safer for everyone.
    So, why is this bill so important to me? Because it is 
actually not about me. This is about the thousands of women who 
reached out to me after their story became public, making me 
realize that almost every woman in our country has a story, and 
that is shameful. So, many of these women have shared their 
emotional stories of pain, but mostly about how they were 
silenced because that is what forced arbitration does. It turns 
out that silencing is the harasser's best friend because it 
perpetuates the systemic problem of protecting predators and 
pushing women out of the workforce.
    Sadly, my story is not unique. Sexual harassment in the 
workforce is not a new problem, neither is use of forced 
arbitration to deal with it, to cover up the dirty laundry. You 
have Dov Charney, the founder and former CEO of American 
Apparel, sexually harassing people for years, but nobody ever 
knew about it because of secret arbitration.
    Another horrifying example is the more than 180 people who 
reported sexually being assaulted by a massage therapist when 
they simply went to get a massage at Massage Envy spas. These 
women put their trust into a company and its employees only to 
suffer the trauma of being forced back into secrecy.
    One case, in particular, that really resonated with me was 
Lilly Sibert from California because she says she was sexually 
assaulted by her therapist, and then when she went to cancel 
her Membership with Massage Envy, simply going to do that in 
the app she agreed to forced arbitration. That doesn't seem to 
be fair.
    There is a story of Danny Masterson, the actor and well-
known Scientologist who allegedly raped several women, but 
because there is a forced arbitration clause in the Scientology 
contract, one of the women say they were coerced into signing, 
these cases will probably never see the public eye.
    It is impossible to know exactly how many women have faced 
this kind of situation. You just heard from the other Witness, 
60 million Americans have these clauses in their employment 
contract. By 2024, 80 percent, 80 percent of the private sector 
nonunion workers will be forced into arbitration.
    That is why I aim to change this. My going public opened 
the floodgates to shed a light on a pervasive epidemic--
Weinstein, Cosby, O'Reilly, Moonves, Matt Lauer, Charlie Rose, 
Mark Halperin, and so many more.
    Since my movement started, I helped States to pass these 
eradicating arbitration laws as well, but here is what is 
happening when those laws go to be tested at the State level. 
The judges feel compelled to honor the Federal law, and so they 
are still putting these cases back into arbitration.
    I want to leave you with this and have you understood just 
for a moment what it feels like to have the courage to come 
forward because this could be your wife, your daughter, or your 
granddaughter.
    A woman decides to go to HR to complain. If she has an 
arbitration clause, the reaction will be, phew, good, no one 
will ever know about this. Her case is promptly thrown into the 
secret chamber. The woman will likely be blacklisted, demoted, 
and fired from her job. In arbitration, she gets no appeals. 
So, the cycle continues. It is a repeat business thing. We have 
lost millions of women in the workforce due to this and just in 
the last year due to COVID--
    Mr. Johnson of Georgia. Ms. Carlson, if you could wrap up, 
please.
    Ms. Carlson. Thank you to brave Members of Congress from 
both sides for drawing the line in the sand because this is not 
partisan; this is apolitical. It is my great hope that we can 
get something done that is bipartisan to help women in this 
country. Thank you.
    [The statement of Ms. Carlson follows:]
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    Mr. Johnson of Georgia. Thank you, Ms. Carlson. We have 
seen and heard you walk in the halls of Congress for years, and 
I thank you for your diligence.
    With that, I would like to now recognize Mr. Weiss, who is 
recognized for 5 minutes.
    Mr. Weiss, unmute yourself.

                    STATEMENT OF JACOB WEISS

    Mr. Weiss. Sorry. Good morning, Chair Johnson, Ranking 
Member Buck, and the Subcommittee Members. My name is Jacob 
Weiss, and I have been a business owner in e-commerce for the 
last 20 years. In 2010, I started OJ Commerce, a business that 
sells home goods to online marketplaces and on our own website. 
We sell thousands of brands and over a half million items. A 
significant part of our business is done through Amazon's 
marketplace.
    I am here today to share my experience trying to hold 
Amazon accountable for the harm it has caused my business.
    OJ Commerce has a team of hardworking employees who have 
grown OJ Commerce into a successful business. Amazon's forced 
arbitration clauses have made it impossible to get a fair 
shake. The system is rigged against small and mid-sized 
business owners.
    Amazon controls so much of the online retail market that it 
is impossible for an e-commerce company to succeed without 
selling on its website. Before Amazon would let me sell on its 
site, it forced me to sign an agreement. I couldn't negotiate 
the terms of that agreement, and I couldn't sell on Amazon 
without signing that agreement. Since no e-commerce company can 
survive without Amazon, I had no choice but to sign that 
agreement.
    Amazon's agreement forbids lawsuits and forces arbitration 
to resolve disputes. The agreement also forbids class actions, 
which means businesses can't share the cost of arbitrating 
against Amazon. This class action waiver alone has insulated 
Amazon from even having to face justice, because justice is 
cost-prohibitive. It simply makes no sense to risk tens of 
thousands of dollars in arbitration, legal, and expert fees, to 
recover a few thousand dollars. As a business owner, those few 
thousand dollars can mean the difference for making payroll.
    Forced arbitration puts businesses like OJ Commerce at a 
severe disadvantage:

    (1)   The filing fees are thousands of dollars.
    (2)   You have to pay arbitrators hundreds of dollars an hour to 
hear your case.
    (3)   Arbitration severely limits the scope of discovery which 
makes obtaining the evidence you need to prove your case nearly 
impossible.
    (4)   Amazon has mastered the art of driving up the cost of 
arbitration through motions, objections, and hearings.

    So, while proponents of arbitration tout its speed and 
efficiency, my experience shows the process is slow, expensive, 
and financially infeasible for many claims.

    (5)   Arbitration rulings are not published, which means we cannot 
see what Amazon has done to other businesses or how those businesses 
have fared in arbitration. We are left in the dark, but Amazon has all 
the information.
    (6)   Parties can strike potential arbitrators and rank others, 
which means arbitrators have a financial incentive to Rule in Amazon's 
favor so as to keep the more likely repeat arbitration player happy and 
be selected again.

    For Amazon, this creates the perfect storm. Companies give 
up before they even start, because they do not have the budget 
for this expensive process. The proof is in the excellent 
report the Subcommittee created on digital markets. Despite 
millions of businesses on Amazon's website, despite internet 
message boards teeming with thousands of complaints against 
Amazon, over a 5-year period, only 163 arbitrations against 
Amazon. That statistic is mind-blowing.
    I have seen this firsthand through two forced arbitrations 
against Amazon. The first arose when Amazon overcharged OJ 
Commerce for shipping costs. Amazon fixed the problem when we 
notified them of the error but refused to refund the 
overcharged amounts. Left with no choice, we initiated forced 
arbitration. Amazon took us all the way through a very 
expensive arbitration proceeding where OJ Commerce eventually 
prevailed on some of its claims, but the process cost us over 
$50,000 in just arbitration fees, not even attorney's fees. OJ 
Commerce had to pay those fees just to have its day in 
arbitration court. After all those fees, I have recovered very 
little of what I have lost.
    The second arbitration against Amazon is ongoing. So, I 
cannot go into detail, but I can tell you it has been 9 months 
so far. So much for quick and efficient resolutions.
    Small businesses are the lifeblood of the American economy. 
Historically, companies like OJ Commerce used the antitrust 
laws and court system to stop marketplace bullies like Amazon. 
Forced arbitration--
    Mr. Johnson of Georgia. Mr. Weiss, if you would wrap up, 
please. You are beyond your 5 minutes.
    Mr. Weiss. Yes, Mr. Chair.
    Forced arbitration and class-action waivers have replaced 
that with a system that allows Amazon to avoid facing justice.
    I urge you to pass the Forced Arbitration Injustice Repeal 
Act. It will restore balance to the marketplace and stop abuse 
of an unworkable system. Businesses are not looking for 
handouts. We are just looking for a fair system. Thank you.
    [The statement of Mr. Weiss follows:]
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    Mr. Johnson of Georgia. Thank you, Mr. Weiss.
    Now, I recognize Attorney King for 5 minutes.

                   STATEMENT OF G. ROGER KING

    Mr. King. Thank you, Mr. Chair and Mr. Nadler, thank you 
also for joining us this morning. Ranking Member Buck, and 
distinguished Members of the Subcommittee, thank you for also 
accepting my written testimony and I would ask the appendices 
to the testimony also be made part of the record.
    Mr. Chair, I am the only practitioner testifying today. I 
have spent 50 years, if you will, involved in arbitration. I 
have drafted arbitration agreements. I have appeared in 
arbitration hearings. I have followed the policy developments 
regarding arbitration, and I believe I have a perspective that 
would be helpful for the subcommittee.
    First, I would like to level set the discussion. Proponents 
of arbitration are not here to condone any type of sexual 
harassment, hostility in the workplace, or the like.
    Ms. Carlson, you have our support. We do not condone those 
activities. I would note, I don't even think you ever went 
through the arbitration process. You were able to get your 
story out without any impediment, and indeed it made news and 
news that was followed, and we concede that. That is not the 
discussion.
    Arbitration has many, many, positive attributes. It is 
quicker, notwithstanding [inaudible]. It is undisputed that it 
is much more expeditious than going to court. It is less 
expensive.
    Mr. Weiss, I don't know your case, but I would suggest to 
you if you took your issues to court, you would be paying much 
more than you have paid today, much, much more, and you would 
still be in court, and you would still be waiting probably for 
that first even discovery proceeding.
    With respect to the direction of this testimony and this 
hearing, I would submit to you we have it backwards. Every 
suggestion I am hearing--and we have heard from proponents to 
do away with arbitration is to put everybody in the court 
system. I would call this the Forced Litigation Act, if you 
will, pushing everybody, even those that can't afford it, into 
somehow a judicial contentious relationship in a court. There I 
would submit to you employers are going to have even more 
advantages, and it is going to cost even more for the consumer 
of the employee.
    Let's break this down. Mr. Buck, you noted this in your 
opening remarks. Our court systems today are overrun, totally 
overrun. If any Member of this Committee would spend at least a 
week in a courthouse in their district or in their State, they 
would readily see the problems faced with our judicial system. 
The solution is not to push everybody into the courts. The 
courts can't handle it. The courts aren't equipped to do it. 
So, the intelligent, thoughtful approach I would suggest here 
is to look to the positive attributes of arbitration, which are 
many.
    Now, in the professor's testimony and other remarks today, 
I note the criticism of the United States Supreme Court. Well, 
let's step back here just for a moment. We have decision after 
decision by various Members of the court from various 
ideological approaches. These are not all 5-4 cases. Virtually, 
every member of the United States Supreme Court has supported 
at one time or another arbitration. There is good reason for 
that, because the system works.
    As I note in my written testimony, Justice Breyer has 
stated the many positive attributes of arbitration. So, let's 
not mislead people. There is consensus, even though the 
harshest critics of arbitration may push back, that there are 
positive attributes of arbitration. That is a given.
    Second, let's also concede that our courts are not equipped 
to handle whatever the multimillion-dollar figures that were 
suggested. We cannot have a flood of people simply going into 
courts. That won't work. Furthermore, most litigants, most 
individuals find their court system is not friendly.
    Next, I would like to really rebut the continuing 
misinformation that there is secrecy attached to all 
arbitration proceedings. That is not correct. The discussion 
regarding nondisclosure agreements and confidentiality 
agreements, as Mr. Buck stated, is a totally different 
discussion. Those types of clauses are not in every arbitration 
agreement, nor should they be.
    Furthermore, the thoughtful way to go to is the way the 
American Arbitration Association is going that permits anyone 
involved in arbitration to disclose the issues that were 
discussed and the resolutions of the same. Indeed, in 
California, arbitration decisions are reported by State law.
    So, there is not the equation of secrecy in arbitration. 
That is just flat wrong. We can talk about NDAs and 
confidentiality perhaps in another hearing.
    Furthermore, it is incorrect to suggest that the slow legal 
regress--it is wrong to suggest that the Equal Employment 
Opportunity Commission, the National Labor Relations Board, et 
cetera, do not have a role in vindicating employee rights. You 
cannot foreclose individuals in arbitration from going to those 
Federal agencies and State agencies, and many more. It is a 
violation of law to do so.
    Mr. Johnson of Georgia. Mr. King, if you could wrap up. You 
are beyond your 5 minutes.
    Mr. King. Sure. Thank you, Mr. Chair. There is absolutely 
no way to prohibit that. That is against the law. Finally, 
claimants do better in arbitration than they do in the courts. 
That is established. So, I would be happy to carry on this 
dialogue, Mr. Chair, as we proceed with this hearing. Thank 
you.
    [The statement of Mr. King follows:]
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    Mr. Johnson of Georgia. Thank you, Mr. King.
    It is now my pleasure to recognize the Chair from the Full 
Committee of the Full Committee, Mr. Nadler, for questions, 5 
minutes.
    You are recognized, Mr. Nadler. You may want to unmute.
    Chair Nadler. Okay. Am I unmuted now?
    Mr. Johnson of Georgia. You are.
    Chair Nadler. Can you hear me? Okay.
    Thank you. Thank you, Mr. Chair.
    Professor Gilles, forced arbitration has proliferated in 
the workplace. According to the Economic Policy Institute, more 
than half of working Americans are subject to forced 
arbitration, up from just 7.6 percent of workers in 1995. As a 
result, workers are often funneled into an arbitration trap 
that is expensive, time-consuming, and secretive. How does 
forced arbitration favor employers over workers?
    Ms. Gilles. Thank you, Chair Nadler, for the question. I 
think that there are a number of ways in which employers are 
advantaged. For example, they pick the arbitral provider. Many 
of you are lawyers. If you could pick the judge and the jury 
without meaningful input from your adversary, that is a huge 
advantage. So, right off the bat, the system is not to be 
advantage of employees and to the advantage of repeat player 
employers.
    They also write the rules. So, while, Mr. King sadly 
described this as misinformation, the truth is that employment 
arbitration, each arbitration is itself secret, right? You are 
not supposed to talk about the arbitration. That is why Mr. 
Weiss is not talking about ongoing arbitration with Amazon. 
That means that employees do not know when they have claims 
that are common with other employees. They don't know about the 
practices that might be firmwide, employerwide. That is 
something we don't see in the court system.
    I mean, there are lots of other aspects of arbitration that 
don't benefit employees. I think you talked about them, Chair 
Nadler, in your opening statement: No discovery, no rules of 
evidence, no right of appeals, no class actions or collective 
actions, and hugely expensive. There are tons of problems, and 
that is why we see so few employees actually go into 
arbitration.
    Chair Nadler. Thank you. Now, forced arbitration is even 
more common in low-wage workplaces and in industries that 
include a disproportionate number of women and minority 
workers. This has dramatically eroded the ability of these 
workers to collectively hold their employers accountable for 
systemic workplace violations, such as widespread harassment 
and discrimination. How does forced arbitration suppress the 
ability of workers to file claims?
    Ms. Gilles. Well, I think you just sort of said it. The 
truth is that for low-wage workers, especially low-wage workers 
who are in frontline critical industries, healthcare, 
education, workers we really need, these workers already face 
tons of disadvantages in accessing justice. Forced arbitration 
puts a barrier between them and the courthouse that is often 
impenetrable. They can't get lawyers to represent them because 
their claims are often not a significant enough value. They 
can't brave class arbitrations because the employers have 
barred those in the contractual provisions.
    It can be very hard to try to prove claims that are by 
their nature systemic, right? How do you prove workplace 
harassment? That is a claim where you need evidence about the 
entire workplace. So, for an individual employee, that is a 
tough, tough row to hoe.
    Chair Nadler. How would you say that forced arbitration 
undermines the rights of women and minority workers as it 
relates to access to counsel?
    Ms. Gilles. Well, first off, I just want to step back and 
say that women and minorities, low-wage workers, these 
vulnerable groups already have massive underrepresentation 
problems. I think even in the courthouse, getting to the 
courthouse, it can be very hard to find a lawyer. So, we have 
to deal with the justice gap, even once we get rid of forced 
arbitration, knock on wood.
    It is true that in arbitration, these issues are compounded 
because, again, the employer is controlling the arbitral forum, 
and often picking the arbitrators, they have a lot more access 
to information about the arbitrator and about the arbitral 
provider. So, they are going to pick providers and arbitrators 
that benefit them. That is really hard for an employee who 
knows very little about an arbitral regime to try to go up 
against.
    Mr. Johnson of Georgia. The gentleman's time has expired.
    At this time, I will recognize the gentleman, the Ranking 
Member, Mr. Buck, for 5 minutes.
    Mr. Buck. Mr. Chair, with your permission, I would ask that 
you move down the line to other Republicans, and I will ask 
questions last, if that is okay?
    Mr. Johnson of Georgia. That will be fine. I am doing the 
same thing, Ranking Member Buck.
    So, at this time, we shall recognize the gentleman from 
California, Mr. Issa, for 5 minutes.
    Mr. Issa. Thank you, Mr. Chair. The question I have for Mr. 
King or a series of them, is there any prohibition on States 
limiting secrecy and/or limiting what can be in other words 
contract law regulated by the State? Are there are 
implementations from the States? Do some States already have 
provisions? I will just give the example of California, where a 
race or sex discrimination, notwithstanding binding 
arbitration, you still have a State remedy?
    Mr. King. You are absolutely correct, Congressman. Not only 
in California, but other States have outlawed or prohibited 
nondisclosure agreements.
    This is not a discussion about secrecy or confidentiality. 
We should be talking about arbitration and its attributes or 
criticisms if people have them. It is a total misnomer. It is a 
red herring.
    Mr. Issa. Now, this Committee and the Oversight Committee 
have done extensive hearings over the years about the various 
major league football, baseball, and so on. Don't they all on a 
mutual basis choose binding arbitration? Isn't that a choice of 
the very powerful players' union and the, if you will, the 
billionaires and millionaires?
    Mr. King. Absolutely. I mean, arbitration is so well-
accepted at so many different levels in our society, and it is 
the only way to proceed. Our court systems are not equipped to 
handle the millions of claims that are being suggested to be 
thrown into court litigation.
    Mr. Issa. So, let me see if we can get some consensus here 
in 5 minutes. It seems like all the Witnesses, yourself 
included, have serious concerns about forced secrecy in binding 
arbitration. If we were to break out the FAIR Act, we were to 
break out, if you will, a little bit of what everyone is 
talking about, if we bifurcated, if you will, all of the these, 
we will call them forced arbitration into damages and 
restitution versus secrecy and require that any secrecy be a 
separate consideration voluntarily entered into a not part of, 
if you will, the first decision, the arbitrator, would that 
improve the current law as to sex and race discrimination, but 
as to a myriad of other violations?
    Mr. King. Yeah, absolutely. That is a much more thoughtful 
way to proceed. We can talk separately about confidentiality 
and secrecy and talk about how that should or should not be 
handled and talk about then how damages are pursued.
    We have not mentioned yet in this hearing, Congressman, 
ADRs, alternative dispute resolution procedures. That is what I 
would really suggest this Committee look at. There are so many 
ways that consumers, employees, and others can benefit by not 
being in the courts and getting their issues resolved. That is 
the direction we ought to be headed.
    Mr. Issa. Can I also maybe get a second--I am hoping 
everyone agrees on this part--can we also agree that if there 
are a series of arbitrations and they are concluded and there 
is no secrecy, that there is no prohibition on either Federal 
or State laws being passed that would allow separate class 
action for a pattern of behavior? Would that be correct? In 
other words, rather than the individual who gets his 
arbitrated, the group could still be allowed to form, but form 
based on, if you will, the disclosure of a series of 
wrongdoings in which, whether you win or lose in arbitration, 
you would be able to make that case, specifically, that it was 
a constant pattern. In other words, we could pass a separate 
law for that kind of bad actor.
    Mr. King. You certainly could. I would welcome that. I 
think others on this side of discussion would welcome a very 
thorough and thoughtful discussion about class actions. There 
are a lot of misuses and abuses. We would like to have that 
discussion on a bipartisan basis.
    Let's not suggest that class actions are good for 
consumers. The data goes on and on and on. They go on forever. 
They are very expensive. At the end of the day, you get that 
little notice in the mail that you are going to get $5.50 or 
something, and most people just disregard it. That is such a 
racket, if you will, Congressman, that has been portrayed as a 
savior for the American consumer. Not true.
    Mr. Issa. I have been the victim of class action--well, SEC 
abuse, if you will, in the past. So, I am aware that there are 
a lot of attorneys that make all the money in those cases. As 
my time is expiring, on the first secrecy--
    Mr. Johnson of Georgia. The gentleman's time has expired.
    Mr. Issa. --is there anyone that would like to--that would 
say anything different from the other Witnesses as to the 
questioning related to secrecy?
    Mr. Johnson of Georgia. The gentleman's time has expired.
    Mr. Johnson of Georgia. I now recognize the gentleman from 
New York, Congressman Jones, for 5 minutes.
    Mr. Jones. Thank you, Mr. Chair. Professor Gilles, thank 
you for your illuminating and, frankly, shocking testimony. 
Before I ran for Congress, I was a lawyer for Westchester 
County, in which capacity I was a legal adviser to the 
Westchester County Human Rights Commission, which I hope Mr. 
King would consider to be a practitioner.
    In that capacity, I saw how the ability of Westchester 
County residents to have their fundamental rights vindicated 
was hampered by these forced arbitration agreements. My 
experience as a practitioner and as a former law clerk in the 
Southern District of New York, causes me to be shocked for that 
reason by his inaccurate statement that these forced 
arbitration clauses do not prevent people from getting their 
rights vindicated by the EEOC or, in my case, by the 
Westchester County Human Rights Commission.
    In any event, I want to make sure my colleagues and the 
American people appreciate how the situation became so bad in 
the first place, and that is the far-right majority on the 
United States Supreme Court.
    Professor Gilles, hasn't the Roberts Court consistently 
supported forced arbitration in a series of predominantly 5-4 
decisions along ideological lines?
    Ms. Gilles. Oh, that is an easy one. Thank you for the 
softball.
    Yes, of course, I don't actually even understand what Mr. 
King is saying here. Since 2011 when the Supreme Court decided 
AT&T v. Concepcion, the Court has decided by my count about 17 
decisions enforcing arbitration clauses and the vast majority 
of those cases have been 5-4, with the conservatives in the 
majority. The dissents are growing ever more [inaudible] for 
Congress to Act because, at some point, it becomes difficult 
for lower court judges to do anything other than follow the 
Supreme Court's law, even if they disagree. Many, many courts 
have expressed that they disagree.
    So, this is a real crisis in American law, and it is a 
crisis brought on by what many scholars think is a 
misinterpretation of the Federal Arbitration Act.
    Mr. Jones. Thanks to that far right majority, can 
corporations use arbitration to get away with discriminating 
against seniors, for example, violating the Age Discrimination 
in Employment Act?
    Ms. Gilles. Sorry about that. Yes, they can. In fact, 
corporations can violate all the statutes that Congress and the 
State legislatures enact, and we might not ever know about it 
because, again, despite what Mr. King has said, these cases are 
shunted into hermetically sealed private arbitrations.
    Those arbitrations are not made public. There is no 
recording of those arbitrations. There is no court reporter. 
There is no precedent from an arbitration decision. So, 
violations of law are happening, and they are going undetected, 
and so I think this is, again--I will just keep saying--a real 
crisis in American law at this moment.
    Mr. Jones. Thank you. This Congress, my colleagues and I, 
on the Democratic side, are fighting to pass the Equality Act, 
which is sponsored by Subcommittee Chair Cicilline. The 
Equality Act is personal to me. One of the things it would do 
is hold corporations accountable for discriminating against 
LGBTQ plus people like me in housing credit and other areas of 
public life.
    Thanks to the Roberts Court, could corporations exploit 
forced arbitration to keep discriminating against LGBTQ plus 
folks with impunity?
    Ms. Gilles. Thank you for the question. I think this is 
really worrisome because as you and your colleagues seek to 
enact protections--and I applaud you for doing so--those 
protections, those laws mean nothing if they can't actually be 
enforced. The way that most law in this country is enforced is 
through private rights of action that you include in these 
statutes that allow people who have been harmed by violations 
of those statutes to bring claims.
    When we instead require or when corporations instead 
require that these people bring claims in arbitration, most 
will not do so, and those violations are never heard about. 
While it is true we have public agencies who can engage in 
enforcement actions and investigations, you know as well as I 
do, agencies are--it is impossible for agencies to monitor 
every transaction--
    Mr. Jones. Professor Gilles?
    Ms. Gilles. Yes, sorry.
    Mr. Jones. I just want to ask you another question. Now, 
that we have a 6-3 far-right majority--
    Mr. Johnson of Georgia. The gentleman's time has expired.
    Mr. Jones. Thank you.
    Ms. Gilles. Sorry about that.
    Mr. Jones. It is all right.
    Mr. Johnson of Georgia. I shall now recognize the gentleman 
from Louisiana, Mr. Johnson, for 5 minutes.
    Mr. Johnson of Louisiana. Thank you, Mr. Chair.
    I just have to say at the outset here, your opening 
statement this morning seemed to portray all American companies 
somehow as the bad guy and that they have sinister motives 
aimed at scamming consumers and eviscerating their 
constitutional rights. Sometimes, it feels like that narrative 
and that broad brush have really gotten old and tired. Then we 
were just told a few moments ago that there is a far-right 
Supreme Court that is creating a crisis in American law and 
somehow abusing the Arbitration Act.
    This is the first time, by the way, I have heard Chief 
Justice Roberts referred to as a far-right jurist in quite some 
time. Look, arbitration is a key part of the American judicial 
system. It is advantageous to litigants on all sides, and we 
would abandon it at our peril. I was a practitioner for 20 
years before I got to Congress. I engaged in a lot of 
arbitration, both on behalf of plaintiffs and defendants, and 
it worked really well. That has been my experience.
    As Mr. King pointed out this morning, he summarized: 
Arbitration is quicker, less expensive. It keeps our court 
system from being overwhelmed with vexatious litigation that 
doesn't behoove anybody. Frankly, it is a system that works 
pretty well.
    Now, could there be some improvements in it? Yeah. Of 
course, for example, in the area of sexual harassment claims, 
such as the tragic ordeal that Gretchen Carlson experienced and 
summarized a little bit this morning. We can reform those 
things, and hopefully we can bypass the partisanship and reach 
some consensus on those points.
    Let me ask just a few questions of Mr. King.
    Mr. King, I think your testimony has been mischaracterized 
here the last couple moments, but can you just summarize 
briefly for folks who may be following this at home, what are 
just some of the pros and cons of the typical arbitration as 
opposed to the typical lawsuit? You mentioned cost and 
efficiency, but can you articulate that a little bit more.
    Mr. King. Certainly, Congressman. You are going to get to a 
hearing much quicker in arbitration than you will in our 
courts. The court systems are bogged down in discovery and all 
types of motion practice. Arbitration is more expeditious for 
sure. As far as cost, I don't know where this information is 
coming from, but there are very low filing fees, if any, in 
arbitration. The Triple A, the American Arbitration 
Association, has led the way. So, it is much easier to get into 
this system of justice than it is in the courts. Furthermore, 
to suggest that everybody is going to get a jury trial or have 
a lengthy trial is really misleading the American public. Very 
few cases go to trial. Very few cases even go to verdict in any 
way, shape, or form if it comes from a judge.
    So, you are going to get a decision from an arbitrator much 
quicker, and I would submit just as fair if not fairer. It is 
wrong to suggest that the employer picks the arbitrator. You 
have been involved in arbitration. I have too. It is someone in 
the middle. You go back and forth to pick a neutral. I wish I 
had the opportunity just to pick who I wanted. Not true. 
Absolutely not true.
    Also, in arbitration, the claimants do better. The facts 
are the facts. On the whole, they do better than class action 
or in litigation. So, I don't know what the push back is here 
other than perhaps the direction to push people into class 
action litigation, and that is not an efficient way to do 
business.
    Mr. Johnson of Louisiana. In fact, in my experience, as you 
pointed out, arbitrators who are fair and judicious earn that 
reputation, and the American Arbitration Association, is the 
group where they are Members of. When the litigants or the 
parties go to choose their arbitrators, it was my experience 
that we always tended to go to those who had a great reputation 
for being fair to both sides.
    So, they get more work. They get to be arbitrators on more 
cases, and that helps overall the system. It is almost kind of 
like a free-market analysis that people get to make when they 
choose those. I am situated right now as we speak just a few 
miles away from a very active State district court that I used 
to practice in on occasion. I looked at the stats for 2019. 
They literally had less than five jury trials in that entire 
civil district court over the period of that year. Almost 
everything is decided by a judge, and so I think there is just 
a lot of misinformation.
    Just really quick. I think I have got a couple seconds 
left, but some plaintiff's attorneys, even those that are paid 
on contingent fee structure, won't bring cases that seek low 
volume damage amounts. Does arbitration help claimants in that 
situation?
    Mr. King. No, absolutely not. This so-called arbitration 
reform movement that the professor talks about harms low-income 
workers particularly because they don't have the wherewithal; 
they don't have the money to get into court. They have 
relatively low claims. They can't attract counsel. If they 
don't have an ADR, if they don't have some type of arbitration 
provision to take part in, they are left out in the cold.
    This whole discussion was turned around. We are backwards. 
We are pushing people into a system that is overcrowded, not 
working, and not available.
    Mr. Johnson of Georgia. If the gentleman would wrap up; 5 
minutes is over.
    Mr. Johnson of Louisiana. Thank you, Mr. Chair. Thank you, 
Mr. King.
    I yield back.
    Mr. Johnson of Georgia. Thank you.
    I will now recognize the gentleman from Florida, Mr. 
Deutch, for 5 minutes.
    Mr. Deutch. Thank you. Thanks, Mr. Chair.
    Mr. Chair, I want to point out what we just heard one of 
our colleagues talk about arguments being old and tired. I 
would actually like to talk about the old and the tired. Real 
people. Because in September of 2017, Hurricane Irma cut off 
power across south Florida, and the outage turned the Hollywood 
Hills Nursing Home in Broward County into a death trap. Without 
air conditioning, the temperature climbed, and in the end, 12 
residents died, dozens were injured in the sweltering heat.
    Surviving family Members, Mr. Chair, went to court to seek 
justice for their vulnerable loved ones who they thought would 
be safe. Plaintiffs in one suit allege that it took 3 days 
before anyone called 911, but the nursing home tried to keep 
the case out of court using predispute arbitration clause. The 
families of those whose hearts gave out in that oppressive heat 
never got a day in court. They also didn't choose to have this 
wonderful arbitration govern; it was forced upon them.
    The overly broad and unfair arbitration clause that was 
forced upon the residents and their families prevented them 
from exercising their right to have their claims heard by a 
judge.
    So, Professor Gilles, if you could speak very specifically 
in instances like this about the risk to nursing home residents 
and their families, when they are presented with an arbitration 
agreement when they first move into a nursing home or long-term 
care facility, what does that exchange look like? What is the 
discussion that takes place? What is offered to them at that 
moment?
    Ms. Gilles. Thank you for the question. So, I am not there 
yet personally, although my parents are getting older, and they 
live in your district. So, thank you for your representation, 
but this is how I think it works: You are looking for a nursing 
home for mom and dad, and you are thinking about a lot of 
things. There is a lot going on in that decision, and when you 
bring them in and you are filling out these admission forms, 
the last thing you are thinking about is that this place that 
you are entrusting with your parents is going to engage in 
harmful or negligent behavior.
    So, as with so many of these situations, arbitration is 
forced upon us at the moment when we need the service or the 
product or the job. We are not thinking that something terrible 
is going to happen down the line that is going to require us to 
go to court.
    If I could just take a moment, I just feel like Mr. King 
keeps saying that I am misrepresenting his views and I just 
have to say I think he is misrepresenting the facts. There is 
no argument that any serious economist believes that 
arbitration is better, faster, cheaper for consumers and 
employees as compared to class actions. Even the CFPB, as well 
as lots of economists, have proven that, but this--talk about 
old and tired, this old and tired Chamber of Commerce view 
continues to infect this conversation despite just so much data 
on the other side. I guess I just wish Mr. King would read the 
real studies as opposed to the studies that the chamber gives 
him.
    Mr. Deutch. Professor Gilles, I just want to get back to 
this moment when the family is making a decision about a long-
term care facility, the arbitration clause, is it a separate 
document? Is it inside something else? There is an admission 
packet obviously that has lots of paperwork, and this is a 
difficult time for someone who needs nursing care and their 
family, correct? How does that impact the fairness of agreeing 
to keep disputes out of court?
    Ms. Gilles. Right. Well, so we are not thinking about the 
court at that moment, right; we are thinking about mom and dad. 
So, these provisions, like all forced arbitration provisions, 
are hidden in the fine print of really long documents that you 
have to read, but none of us really read. So, I think even 
lawyers don't really read these documents as carefully as we 
should because we need to do this thing, this really traumatic 
emotional thing of putting our parents in to what we hope is a 
safe place.
    So, again, I think it is a fraught situation, and I don't 
think that most people know the rights that they are giving up 
at that moment.
    Mr. Deutch. Professor Gilles, I appreciate that. I thank 
the Chair for shining a bright light on the abuse of 
arbitration, the unfairness of these agreements that are forced 
upon American consumers, and I thank Congressman Johnson for 
introducing the FAIR Act to remedy this injustice.
    I yield back the balance of my time.
    Mr. Johnson of Georgia. The gentleman's time has expired.
    I will now recognize the gentleman from Florida, Mr. 
Steube, for 5 minutes. I am sorry.
    Mr. Steube. That is fine. Thank you, Mr. Chair.
    First, my questions are for Mr. King, but what I would kind 
of like to address is something that I don't feel is accurate 
that Ms. Gilles had stated that we are forcing an arbitration 
clause on an unknowing person. We have freedom of contract in 
this country. You are entering into a contract that has 
arbitration clause, so the statement that the person is 
unknowingly entering into these arbitration clauses is not 
factually accurate.
    Now, they may not read the clause in the contract that they 
are signing, but that is not to say that they are unknowingly 
entering into these agreements. So, first, Mr. King, I would 
like to, if you could address those issues as it relates to--
these are parties on both sides of a contract that are entering 
into an agreement pursuant to contract law where these 
arbitration clauses are housed, so they are not unknowingly, 
unwillingly entering into these agreements. So, if you could 
address that first.
    Mr. King. Well, I think you are absolutely right. People 
enter into all kinds of agreements, and they do so on a willing 
basis. You don't have to purchase X, Y, or Z. You can go to 
another vendor. Congressman, if I might just one moment, I want 
to rebut what was misinformation here about the United States 
Supreme Court.
    Mr. Steube. Absolutely.
    Mr. King. The Kindred case was decided 7-1; DIRECTV, 6-3, 
Justice Breyer; American Express, decided 5-3, Justice Kennedy 
in the majority; the Nielsen case, 5-3, Kennedy in the 
majority; the Gilmer case, 6-2. It is just inaccurate. We are 
getting so much inaccurate information here. I will put my 
stats up against anybody's. I am not relying on the U.S. 
Chamber of Commerce, although I think they have done a great 
job in this area.
    Back to your question, let's not take away the freedom of 
contract. People have a right to sit down and negotiate 
agreements. They cannot negotiate illegal agreements, and they 
cannot force people to give up rights. It is just inaccurate to 
say that you don't have a right to take your case to the EEOC, 
the NLRB. I dispute the Congressman's position that those 
agencies don't care about people that file charges. They do. 
They do a much better job in many cases than the courts, 
frankly.
    So, we need to preserve the ability of people to work out 
disputes without being forced into a morass of discovery, 
expensive litigation, and all the like.
    Mr. Steube. Yeah. Here in Florida, we haven't had 
litigation in trials due to COVID for over a year. They are 
setting trial dates right now in my district that are in 2022 
and 2023 because litigation has been suspended in court, and 
trials have been suspended in court due to COVID. So, to say 
that you can quickly get into court and litigate those cases, 
especially with what is going on with COVID in our country 
right now, is also not factually accurate.
    Could you give us, Mr. King, a sense of the pros and cons 
of a typical arbitration compared to a typical lawsuit from the 
standpoint of the average American so they can understand the 
differences?
    Mr. King. Certainly. Lower filing fees if no filing fee to 
file arbitration. Filing fees to get in court, expensive 
retainer agreements even to retain counsel. So, just the entry 
in the system is much higher in the judicial system. Second, 
speed to get to trial. As you have noted, in my written 
testimony on page 4, I note the overwhelming burden on our 
Federal courts, let alone COVID-19, as you point out. So, you 
get to a hearing much quicker. It is inaccurate, as the 
professor noted, to say that there is no discovery. Just the 
opposite. The American Arbitration Association rules permit 
discovery, but you don't get bogged down in these motion 
fights.
    If you want to see a waste of time and money, look at some 
of the discovery fights--and I am sure you are aware of this--
that go on in courts. So, you get through discovery quicker. 
You get to a hearing quicker, and you get to the judgment 
quicker, and you do better. The Consumer Benefit Protection 
Board clearly showed that class actions are a sham, that the 
average amount of recovery was minuscule, $32 in the 2015 
report, and only 13 percent of class action participants even 
got a payout.
    In arbitration, as the other Congressman said in his 
practice in this area, arbitrators tend to split the middle. 
They are much more friendly, frankly, to the claimant. So, the 
claimant does better, but by and large, it is a system they can 
participate in. They don't need a lawyer. They don't need to 
hire expensive counsel, and we ought to be talking about ADRs.
    I am, again, surprised that none of the other Witnesses are 
even recognizing the advances that are being made outside of 
the judicial system to solve cases. So, the Supreme Court and 
many, many other courts have recognized the attributes of 
arbitration. Final point I would make on publicity and public 
disclosure. California now requires all arbitration outcomes to 
be filed. Other states are moving in that direction. There is 
not secrecy here. There is efficiency, cost savings, and 
certainty of getting a result.
    Mr. Johnson of Georgia. The gentleman's time has expired.
    I will now recognize the gentleman from New York, Mr. 
Jeffries, for 5 minutes.
    Mr. Jeffries. I thank the distinguished Chair for 
recognizing me, as well as for your leadership in this very 
important area.
    Mr. King just made an observation about individual 
litigants in an arbitration hearing not needing a lawyer. That 
seems to me to be laughable. If you are up against a Fortune 
500 company, a Fortune 1,000 company, a mega-corporation who 
will be lawyered up to the T, how can an individual litigant in 
an arbitration context even expect justice without an advocate 
on their behalf?
    Professor Gilles, is it fair to say that, in many 
instances, these arbitration clauses, which are buried in take-
it-or-leave-it contracts, are akin to what we might refer to in 
the law as contracts of adhesion?
    Ms. Gilles. Yes, they are. This is forced arbitration. It 
is tucked into the fine print. The last Congressman said, it is 
a contract, but I think that is a fiction. Standard form 
contracts are not consensual. When I need to get the newest 
version of iTunes and I get a pop-up on my screen that says, 
``Do you agree to these terms and conditions,'' and the terms 
and conditions include an arbitration clause, it is really 
complex. I click ``accept'' because I want that new version of 
iTunes.
    To call that consent, I think that is what is laughable, 
frankly. That is a fiction. It is a convenient legal fiction 
for big business, but when it harms consumers and employees, I 
think we really have to step back and be clear that this is no 
longer consent.
    Mr. Jeffries. I think Mr. Weiss spoke to this in terms of 
your experiences, and so, Mr. Weiss, do you feel as though you 
had a choice in terms of your small business and the online 
platform that you were utilizing as it relates to declining to 
participate because of an objection that you had to being 
compelled to resolve disputes in arbitration.
    Mr. Weiss. Thank you, Congressman, for the question. No, 
the answer is clearly not. I had no choice as I described in my 
testimony. If I wanted to sell on Amazon, which any e-commerce 
company has to be viable with the amount of control that Amazon 
has over the e-commerce space, I only had one choice: To accept 
or to go out of business.
    I also wanted to speak for a moment in terms of what you 
allude to in terms of going into an arbitration without an 
attorney. I can tell you in my experience, Amazon came with 
four--five very seasoned attorneys practicing 20 or 30 years, 
senior partners at one of the largest law firms in Seattle. 
There would have been absolutely no chance that I had if I had 
been representing myself without an attorney.
    Mr. Jeffries. I thank you.
    Mr. King, I presume that you believe, as I believe you 
indicated in your opening statement, that women have a right 
not to be sexually harassed in the workplace, correct?
    Mr. Johnson of Georgia. Mr. King, put your microphone on, 
sir.
    Mr. King. Pardon me, Mr. Chair. To even suggest that those 
proponents of pre-dispute arbitration procedures condone any 
type of that activity is repugnant to me. I certainly don't 
condone that activity, period.
    Mr. Jeffries. You may not have heard my question. I am not 
sure if your audio was also not working. I said I presume you 
believe that women have a right not to be harassed in the 
workplace, and I also presume that you believe that people of 
color have a right not to be discriminated against.
    Part of the concern, as I understand it, Ms. Carlson, is 
that these provisions actually foster a toxic culture where 
this type of activity is buried underneath the sand as opposed 
to being addressed in a more compelling, comprehensive, and 
public way, which is why it does facilitate the continuation of 
this type of aberrant behavior.
    Ms. Carlson, can you speak to that particular concern that 
I believe many advocates of this legislation have?
    Ms. Carlson. Congressman, thank you so much for the 
question. One hundred percent correct because other women don't 
know that it is happening to other people because of the 
secrecy. I would also just like to rebut what Mr. King said, 
apparently, he knows personally about my particular arbitration 
contract with FOX News, but I would like to read from that to 
prove the point about confidentiality.
    It says right in the agreement, such arbitration, all 
filings, evidence of testimony connected with the arbitration 
and all relevant allegations and events leading up to the 
arbitration shall be held in strict confidence. It also says 
that any papers filed will be filed under seal.
    To that end, my story could not be public. So, I want to 
make sure that I State that, and that is what thousands of 
other people are facing as well--
    Mr. Johnson of Georgia. The gentleman's time has expired, 
but the gentlelady will be allowed to wrap up her answer.
    Ms. Carlson. Thank you. Thank you, Congressman. I would 
just say this comes down to choice, and you don't hear anyone 
on the other side describing that. Why do we have to force 
this? Why do we have to force this on people? Why don't we give 
them a choice?
    Mr. Jeffries. Thank you very much. I appreciate your 
advocacy and your testimony and that of the other Witnesses.
    Mr. Johnson of Georgia. The gentleman's time has expired.
    I now recognize the gentleman from North Carolina, Mr. 
Bishop, for 5 minutes.
    Mr. Bishop. Thank you, Mr. Chair. I have listened with 
interest to the hearing thus far, and I think one of the things 
that seems to be at play is that this is a question that 
requires some balance, and I think the panelists as a whole--I 
am not sure we are getting all the perspectives that are at 
hand. Let me explore just a little bit.
    Mr. Weiss, I am going to pick on you just a little bit you, 
sir. By the way, there is no love lost by me for your nemesis 
Amazon. It is operated by one of the most generous far-left 
donors in politics, but--and I celebrate, sir, your success in 
creating a business. I pulled up your website, though, and you 
have got terms and conditions there. They don't contain an 
arbitration clause, but they do have provisions--there is a 
provision that forum selection clause that would require 
somebody using your site to bring their lawsuit in a 
Massachusetts Federal or State court. There is a contractual 
limitations period requiring them to bring their lawsuit within 
a year. You got disclaimers of warranties to limit your 
liability.
    You are not trying to abuse consumers in having those sorts 
of provisions in your terms and conditions, are you, sir?
    Mr. Weiss. No, of course, not.
    Mr. Bishop. I think, if you were susceptible to being sued 
in State or Federal Court in 50 States, would that make it 
harder for you to be able to survive as a startup business 
building your enterprise?
    Mr. Weiss. Look, I am not an attorney. So, I am not exactly 
sure how it would play out. So, I don't exactly know how to 
answer that question, but to your point, we are set up to do 
business and try to service our consumers and try to offer the 
best service, and hopefully we never have to be sued. We don't 
have arbitration. We haven't been sued a lot. We have been 
sued, not by consumers, primarily collections, partners stuff 
like that. We are clearly in business to try to offer a service 
and a product for our consumers.
    Mr. Bishop. Mr. Weiss, obviously, you are building 
something that people value. I have to pick on you because the 
point is, many times if you are a consumer to Amazon, but you 
are a seller to others. So, the utility of some of these things 
can get lost where the people are focusing on highly emotional, 
just on one side. So, as I said, sir, I don't mean to pick on 
you because I do, I think we need to celebrate people who are 
building businesses that service all.
    I think it is important for us to reflect on the fact 
that--take the nursing home example Mr. Deutch used. How many 
people would be harmed if there were no nursing home because 
the risk environment was such that the business couldn't exist? 
So, there is great utility--arbitration agreements--I have been 
litigating with arbitration agreements for 30 years, and I have 
seen some situations in which I didn't think it was great, but 
I think you have to proceed with great caution when you are 
throwing all this to the wind. There is a risk of throwing the 
baby out with the bath water. I wondered, Mr. King, just on 
that perspective, I ask you if you have any comment on the 
point I just made that you would like to offer in my time 
remaining.
    Mr. King. Absolutely. The disruption factor for millions of 
individuals that do use arbitration, businesses that use them, 
would be tremendous, particularly if the FAIR Act is construed 
to be retroactive.
    I just want to share a figure. As of September 30th, there 
were more than 650,000 cases pending in our Federal district 
courts. Now, the nursing home example brought up earlier. The 
presumption is, if you took those cases to arbitration, the 
claimants would be treated unfairly. How do you know that? You 
don't know that. In fact, they may have received even more 
money. See, that is the presumption we are dealing with here.
    People presume that they are not going to get a fair deal 
in arbitration, yet they have no experience with it, or they 
make assumptions that are not supported by facts. Claimants do 
better in arbitration. So, I would suggest to you in the 
arbitration setting for nursing homes or other situations, 
arbitration can and will work.
    We can take secrecy out of it. I have already addressed 
that. That is a misnomer. That is a red herring. Secrecy and 
mandatory arbitration are not one in the same.
    Ms. Carlson's situation is a perfect example. Yes, I know 
of your clause. I read it carefully. I know a lot about your 
case. The fact is you were able, notwithstanding that case, to 
publicize your situation throughout the world.
    In this day and age, we live in and the platform economy 
and the ability to instantly communicate, people know if they 
are being treated fairly or not. So, to suggest that you were 
muzzled, of course, is incorrect. We know that is not the 
facts.
    We need to get people involved in litigating disputes in a 
way that makes sense, is less costly, more efficient, and more 
expeditious. Alternative dispute resolution procedures and 
arbitration are the way to go.
    Mr. Johnson of Georgia. The gentleman's time has expired. 
The gentleman's time has expired.
    For the record, the FAIR Act applies only to forced 
predispute resolutions as opposed to after the dispute arises.
    With that, I will now recognize the gentlelady from 
Washington, Ms. Jayapal, for 5 minutes.
    Ms. Jayapal. Thank you, Mr. Chair.
    I just would like to remind everyone who may be listening 
out there about what forced arbitration really is. When was the 
last time you read the fine print of the paperwork required to 
buy a cell phone, to rent a car, or to accept a job? For most 
people, the answer is probably never, not because of negligence 
or irresponsibility as Mr. Steube suggested, but because people 
don't know that these forced arbitration clauses are there, and 
it would take hundreds of hours for anyone to actually read and 
understand these provisions on top of the fact that they are in 
these agreements that people desperately need like job 
agreements.
    So, these provisions that powerful corporations have tucked 
into the fine print have forced workers, consumers, and small 
businesses to waive their constitutional right to seek justice 
in a court of law and allowed for the stealing of $12.6 billion 
from workers in 2019.
    As Ms. Carlson has so powerfully pointed out, these forced 
arbitration clauses allow women who face sexual harassment to 
have few alternatives to fight back. Thank you, Ms. Carlson, 
for your work. I was proud to be a lead cosponsor of the bill 
in both of the last two Congresses.
    Meanwhile, the regulatory agencies are so influenced by the 
corporations they are supposed to regulate that they haven't 
exercised their authority to fix the situation, contributing to 
the worst levels of economic and political inequality in over a 
century.
    Mr. Weiss, in your testimony, you describe how your 
business was forced to spend thousands of dollars, tens of 
thousands of dollars in a costly and lengthy arbitration 
proceeding after Amazon charged you significantly more for 
shipping than your agreement with the company allowed. Forced 
to go through arbitration, you recovered very little of what 
you lost. How difficult is it for anyone, much less someone 
with even less resources than you, to be successful in forced 
arbitration against a giant company like Amazon?
    Mr. Weiss. Thank you, Congresswoman.
    The answer is it is probably almost impossible because it 
was very difficult for us, with the limited resources that we 
do have, to go up against a very large organization with a very 
powerful group of lawyers that was very successful in being 
very litigious at every stage of the game.
    So, from the very beginning, arguing about at which table 
we should we sit, everything caused a hearing. Should we sit in 
Florida? Should we sit in Washington? Then--and it just 
continued to go on and on and on in what was a very, very 
simple dispute--we agreed to A, you charged me B, and you owe 
me the difference.
    It dragged out for over 16 months and tens of thousands of 
dollars in costs, not even costs--when I said over $50,000, 
that was just the arbitration cost. The Triple A charges you 
based on a sliding scale of the value of your damage. So, if 
your damage is 100,000, you pay a lot more than if your damage 
is 50,000. It is almost like you have another partnership. The 
arbitration is a partner in your claim. So, I can't even 
imagine how somebody without the resources or a much lower 
amount of resources than we have, how they can even begin the 
process.
    Ms. Jayapal. Thank you, Mr. Weiss.
    Ms. Gilles, as one of the foremost experts on class action 
litigation, how does Mr. Weiss's experience compare to what you 
see across the country? How easy would you say it is for the 
average employee or consumer or small business to file a 
lawsuit by themselves against a powerful corporation when their 
rights are infringed?
    Ms. Gilles. I think Mr. Weiss is exactly right. It is 
difficult. Even if we set aside forced arbitration, there are 
problems with accessing justice in our ordinary civil justice 
system. Maybe Mr. King and I can agree on this, that the court 
system is not perfect, but it is our system that we have used 
for a couple of centuries, so I am confused by why other 
Members of Congress want to reform this other system called 
private arbitration.
    We should be fixing the system we have that taxpayers 
actually subsidize and make it easier for people, ordinary 
people, to access that system. I think there are lots of ways 
we can do that, but I am not sure why we should put energy into 
this big corporate arbitration procedure when we have a system 
of our own that is public and available and reformable. We can 
fix it.
    Ms. Jayapal. Thank you. A 2020 study by the national 
employment law project projects that by 2024, 80 percent of all 
private sector nonunion employees will be subject to forced 
arbitration requirements like the ones Mr. Weiss was subject 
to.
    Mr. Johnson of Georgia. The gentlelady's time is expired.
    Ms. Jayapal. Thank you, Mr. Chair. I think this is a very 
important issue that we are taking on.
    I yield back.
    Mr. Johnson of Georgia. I thank the gentlelady.
    We will next hear from the gentleman from Indiana--excuse 
me--the gentlelady from Indiana, Congresswoman Spartz, for 5 
minutes.
    Ms. Spartz. Thank you so much. Thank you, Mr. Chair. I 
think it is interesting because I have a little bit different 
explanation and definition of forced arbitration. I personally 
CPA so I am not an attorney, but I have been a legislator for 
some time, and I get very surprised to see when report 
arbitration in our law that forced their stakeholders to go to 
arbitration [inaudible] court system, and a great example is a 
recent surprise bill in law where we forced arbitration on 
stakeholders, and I do not like it, and I have seen it in our 
State code. I generally look at arbitration as being 
[inaudible] contract and a very important freedom if we want to 
have a free society and have free markets, but I have to agree 
with some people here that there is some monopoly power. I have 
been involved in Fortune 500 laws, and I can tell, Amazons, 
Googles, and Facebooks have a lot of power.
    So, we need to make sure that the contracts are 
transparent. So, I really feel that the court system generally 
does not enforce on fair clauses, but is there assumption in 
the law--and I would like to ask Mr. King since he is a 
professional and a practioner--is there assumption in the 
Federal Arbitration Act that needs to be improved to make sure 
that unreasonable, unfair, and biased clauses are not 
enforceable and make sure that we can improve transparency 
versus eliminating arbitration because if we think that this 
big monopoly, oligopolies have less power in the court system, 
we are very naive because the same attorneys are going to be 
there, and it is a complicated and expensive system. It is 
going to hurt the little guy at the end, and someone like the 
gentleman was talking dealing with Amazon, he will have even 
less ability to deal with them, but as a small business owner, 
it wouldn't to actually deal in the court system, too. So, is 
there anything that could be improved in the act, Mr. King?
    Mr. King. Good question. Right now, the law is quite clear, 
I would submit. If you are forced into an agreement by 
adhesion, coercion, subterfuge, deceit, fraud, those agreements 
can be set aside and are set aside. I am not sure we need to 
amend the law, but that is certainly something we can look at. 
I also want to just build on your question. We keep hearing 
about this fine print and people being subject to things they 
have not read or don't understand. How many people in this 
discussion we are having today could point to anyone that has 
read the Federal Rules of Civil Procedures and all the 
procedural rules at the State level and the courts?
    You talk about legalese and difficulty in understanding the 
complexity of arbitration agreements. There are far more in the 
Federal courts and the State courts than you ever see in 
arbitration agreements. I don't understand Mr. Weiss' 
situation. Is he suggesting he would have been better off to go 
with the court? Does he think, as you just mentioned, that the 
company would not come with good legal talent to a court? Does 
he think that somehow, he is going to be advantaged in a court? 
I would suggest just the opposite. He is going to get a much 
better situation with an arbitrator.
    The final thing I would like to say about the Amazon case 
just to make sure we have a level-set discussion here. I was 
told early on in my legal career by one of my best law 
professors: If you only hear one side of the case, you are not 
doing justice to the discussion.
    I am sure there is another side to this discussion that we 
haven't heard, but let's not fool ourselves. You are absolutely 
right. We need to look at alternatives, Congresswoman. We need 
to look at ways of improving the system. Let's not eliminate 
it. If we put 80 million people in our court systems to try to 
have a day in court with jury trials or even judge trials, it 
is not going to work. So, let's be realistic in this 
discussion.
    Ms. Spartz. Thank you. Maybe if, Professor Gilles, is there 
something from your perspective you can say, to improve 
transparency and so we don't have a distortion of--if you can 
comment on that.
    Ms. Gilles. I am sorry, Congresswoman. Can you repeat the 
question? You were fading in and out.
    Ms. Spartz. Sorry. I need to have bad internet connection. 
I am just saying, do you believe in the Federal Arbitration 
Act? Is there something need to be improved to make sure that 
unfair clauses are not enforceable and there is no distortion 
of power from large monopolies in this clause, or you think it 
is addressed in that act?
    Ms. Gilles. No. I think we can fix arbitration and the only 
way I can see to do it to make it fair is to offer consumers 
and employees the right to go to arbitration after a dispute 
has arisen. Providing choice post-dispute is voluntary. At that 
point, it is not forced upon us. We are reading the print, and 
we can make an educated decision about whether to go into 
arbitration--which, if Mr. King is right; it is awesome, and we 
should go to an arbitration--or to go to court and be 
represented in a class action. It might also provide 
individuals with the ability to negotiate for better arbitral 
procedures because they are choosing to go to arbitration.
    Mr. Johnson of Georgia. The gentlelady's time has expired.
    Ms. Gilles. Thank you.
    Ms. Spartz. Thank you.
    Mr. Johnson of Georgia. With that, I would like to now 
recognize the gentlelady from Florida, Congresswoman Demings, 
for 5 minutes.
    Ms. Demings. Thank you so much, Mr. Chair. Let me say you 
are doing an exceptional job.
    As someone who has worked hard a large portion of my life 
to take care of people and to protect people, I struggle when I 
hear some of my colleagues push so hard to put the interests of 
corporations over the interests of people who work hard to make 
those corporations great, especially when we know, just 
listening to this hearing but others as well, that many of 
those corporations are not operating in good faith.
    As a former police chief, I have participated in numerous 
arbitrations, but the decision to go to arbitration was solely 
that of the employees in consultation in that case with their 
union representative. I think when decisions in arbitrations 
are final and binding, it does make a difference when they are 
voluntary.
    Professor Gilles, thank you so much for your testimony 
today, and I would just like to ask you, does a person forced 
into arbitration have a right to appeal an arbitrator's 
decision when it is incorrect as a matter of law or fact?
    Ms. Gilles. There are very limited grounds for challenging 
an arbitral decision under section 10 of the Federal 
Arbitration Act, but you have to show that the arbitrator acted 
in, quote, ``manifest disregard of the law.'' I am sure as you 
can see from the way I describe it, that it is a really high 
hurdle. Given that arbitrators don't even often tell us what 
they are basing their decisions on, they don't write written 
decisions, they are not paid to write, precedential decisions, 
it can be almost impossible to meet that standard. So, I think 
this is not a real appellate right.
    Ms. Demings. Thank you so much, Dr. Gilles. It is 
interesting that I heard earlier that many times in 
arbitration, you get a fairer deal and so that just makes me 
wonder why the arbitration has to be forced if you can 9 times 
out of 10 get a fair deal.
    Ms. Carlson, I want to thank you so much for your very 
powerful testimony and thank you for being with us today. In 
your view, would requiring that arbitration as truly voluntary 
address some of the concerns that you have addressed with us 
today?
    Ms. Carlson. I do think that this comes down to, choice 
Congresswoman, so thank you so much for the question. Let's 
just be realistic. Companies don't want you to know their dirty 
laundry so that is why they force arbitration on to women 
especially with sexual harassment. So, if it was a choice, that 
would be a totally different power balance, you know.
    Here you have the person who is forcing arbitration and 
here you have the woman down here without a voice. I would also 
just like to respond to Mr. King, again, that, yes, I had the 
platform and the resources to make my case public, but I wasn't 
forced into arbitration, Mr. King, unless the courts wanted to 
do something incredibly provocative 4 and a half years ago. It 
is also interesting, Congresswoman Demings, that Mr. King does 
not bring up the statistics with regard to sexual harassment 
victims who go into arbitration, because, number one, we have 
no way of knowing how many thousands of women have been forced 
into arbitration and silenced for forever. We do know that the 
stats show that employees only win less than 3 percent of the 
time. That does not sound to me like it is fair.
    Ms. Demings. Ms. Carlson, I know that this Committee, the 
Full Committee, perhaps, does not want to hear this, but I want 
to, and I think it is very important as a Nation we come so far 
as it pertains to women's rights and fighting against 
discriminatory practices, but we are nowhere near where we need 
to be. Please tell us, again, so we can have a clear 
understanding, how does the arbitration process silence sexual 
assault and harassment survivors? I want to hear it, again.
    Ms. Carlson. Congresswoman, thank you. The minute that you 
go to HR, you have an arbitration clause, they go: Whew. No one 
is going to know about this. Immediately they go into action. 
They put you into the secret chamber, and you are all alone, 
and you have no way of knowing that there is anyone else at 
work going through what you are going through.
    So, what ends up happening is, you get fired and the 
perpetrator gets to stay on the job, and the woman never works 
again. Especially during these times when we have lost a 
million women to the workforce during COVID and we know that 
retaining women increases the bottom line of companies, that is 
why I am asking this Committee to take this seriously.
    Ms. Demings. Ms. Carlson, thank you so much, and we know 
that any company that would practice that is not operating in 
good faith.
    Mr. Chair, I yield back.
    Thank you so much.
    Mr. Johnson of Georgia. Thank you, gentlelady.
    We will next hear from the gentleman from Oregon Mr. Bentz, 
for 5 minutes.
    Mr. Bentz. As a practicing lawyer up until just a couple of 
months ago for well over 30 years, I can share with you the 
many, many, many times I have sadly told prospective clients 
that we could not take their case because the amount involved 
was simply too little to justify the amount they would have to 
spend. Over the 30-plus years that I have practiced, I watch 
the cost of litigation go through the roof, and this is why we 
see so few cases actually making their way into court, not to 
mention the fact that the level of competence required to try 
cases has dramatically increased, and you better know what you 
are doing if you are going to go into court.
    Having said that, we have heard a lot of really interesting 
things today. I am much more knowledgeable now about 
arbitration than I was before, even though, I served as an 
arbitrator. I would like to turn the balance of my time over to 
Mr. King to let him address issues that perhaps he thinks could 
use a little more elaboration, and in particular, I would like 
Mr. King to address this concept of why or why not we should 
wait until after a dispute has arisen before making a choice to 
arbitrate or not.
    So, thank you, Mr. King, if you could take it away.
    Mr. King. Thank you very much, Congressman.
    Post-dispute arbitration doesn't work. It is a nonstarter. 
I know at first glance, it may sound attractive, but once the 
dispute has developed and once the parties are in adversarial 
positions, trying to put the pieces back together again just 
doesn't work. So, it sounds good, but it doesn't work. That has 
been proven time and time, again.
    You need to have some orderly way that is agreed upon 
upfront. You can't change the game. You can't change the rules 
as the dispute is evolving and going to some type of contested 
action.
    Second, filing fees. There is a lot of misinformation so 
far being shared, unfortunately, with the Subcommittee.
    The American Arbitration Association limits filing fees for 
consumers and employees to $300 or $200 or even lower. Many 
company arbitration systems pay for the filing fee all together 
and, also, pay for the attorneys' fees if an attorney is needed 
by the claimant. In fact, in the professor's testimony, on one 
hand she criticizes companies and the cost of getting into 
arbitration, but then she shows how the arbitration system can 
work where there is a lot of arbitrations filed and companies 
are having to pay these fees. You can't have it both ways.
    So that is a misnomer. There is a very low entry level 
financially to get into arbitration. As far as limited 
opportunity for appeal, that is one area that I can agree with 
the professor on, but it works both ways. If the employer 
doesn't do well in arbitration, isn't pleased with results, it 
also has very limited opportunity to appeal.
    As you know as an arbitrator, the arbitrator has tremendous 
authority to set an award that generally will not be set aside. 
The win rate issue here really needs to go back into the 
discussion. We don't have to have litigation. We don't have to 
have jury trials. We don't have to have mandated arbitration 
necessarily. Why not talk again--and nobody seems to want to 
talk about this--about alternative dispute resolution. As a 
former arbitrator, I am sure you probably also used mediation, 
and there are other ways that consumers and employees can 
successfully resolve issues including in the union environment 
is a perfect example.
    People can sit down and work out their differences, and 
conflicts can be resolved. Putting everybody into the courts, 
let alone a class action system, isn't going to work, and no 
one seems to want to address that. I just shared a stat with 
you. I can share stat after stat that are verifiable, that our 
Nation's courts are overburdened. You know this from your 
practice, I am sure.
    Filing a complaint is the first step in a lengthy, perhaps 
multiyear process. To suggest that there is any kind of swift 
justice is just not accurate. As I say in my testimony, justice 
delayed or justice not available is certainly justice denied.
    Arbitration can work. It has worked, and it will work. To 
paint it as some type of system that promotes discrimination 
against women is absolutely dead wrong. I really take offense 
at that. Somehow to suggest that employers in this country that 
use mandated arbitration condone any type of sexual harassment, 
hostile work environment situation, or unfair treatment of 
consumers, is absolutely unfair. That is not where we are.
    In this society we live in today, if an employer mistreats 
an employee or a consumer, word gets out on the internet 
instantly. Companies are concerned about their reputation. They 
are doing what is right. We are very involved in diversity 
initiatives, inclusion initiatives, so, let's not paint the 
picture in an incorrect way here.
    Mr. Johnson of Georgia. The gentleman's time has expired.
    I will now recognize the gentlelady from Pennsylvania, 
Congresswoman Scanlon, for 5 minutes.
    Ms. Scanlon. Thank you, Representative Johnson, and thank 
you for your introduction of the FAIR Act, a bill I have 
cosponsored and enthusiastically support. I am really happy 
that we are dealing with the subject of ending forced 
arbitration because it is, particularly in this financial 
climate, it is an important issue for my constituents.
    Predispute arbitration agreements are now in all our lives, 
and many of us don't even know of every instance in which we 
have agreed to them. A 2015 study by the Consumer Financial 
Protection Bureau found that 53 percent of credit card issuers, 
88 percent of mobile wireless providers, and 99 percent of 
payday lenders include forced arbitration in their contracts 
with consumers.
    American markets are so saturated with these unfair 
contracting terms that, in many instances, consumers have 
limited, if any, other options for fairly contracted products 
or proper judicial recourse if something goes awry. In a world 
built increasingly around mobile phones and credit, giving up 
your fundamental right to trial by jury, is all but mandatory 
to participate in our modern economy.
    My colleague, Ms. Jayapal, highlighted the fact that many 
of these contractual clauses are contained in fine print, but 
what really is a problem to me is the fact that there is just 
no choice. As a lawyer, we call it a contract of adhesion, but 
in plain English, basically, the company has you over a barrel.
    So, I am particularly concerned about the use of forced 
arbitration agreements in private student loan contracts. That 
same Consumer Finance Protection Bureau study that I mentioned 
found that 86 percent of the largest student lenders in the 
private student loan market employ the use of predispute 
arbitration clauses in their contracting.
    So, American borrowers have over $1.7 trillion in student 
debt at this point. My home State, Pennsylvania, has one of the 
highest per capita debt loads in the U.S., an average of 
$36,000 of debt for our student borrowers. So, we are left with 
a system in which students who need private loans are forced to 
decide between waiving their rights or getting a degree.
    Now, the Obama Administration and the CFPB issued a set of 
rules banning the use of forced arbitration, including in 
private student loan contracts, but the Trump Administration 
and the then-Republican majority in Congress repealed those 
protections in 2017.
    Although I expect the Biden Administration to lead a shift 
back towards protecting students, we need to legislate 
permanent protections for those borrowers, and that is why this 
morning I reintroduced our Justice for Student Borrowers Act, 
which would codify the ban on predispute arbitration clauses 
and predispute joint action waivers in private student loans. I 
would like to thank my colleagues, many of whom are on this 
Committee for joining me in introducing this legislation.
    So, Ms. Gilles, you talked about the ubiquitous of forced 
arbitration clauses in private student loans in your testimony. 
While we know that many private student lenders are failing, if 
not bilking, their borrowers, is it wise to allow those lenders 
to shield liability with forced arbitration clauses?
    Ms. Gilles. No, it is not, and I want to thank you for 
reintroducing--or introducing the Justice for Student Borrowers 
Act. This is incredibly important, in large part because it has 
effects that are disproportionately felt among low-income and 
minority communities who are trying to improve their lives by, 
by getting these degrees, by moving up, and then saddled with 
terms that are often unfair. When they try to dispute those 
terms, try to get relief, they are shunted off into 
arbitration.
    I just want to spend a second going back to something Mr. 
King said when asked about why post-dispute arbitration is not 
workable. I think he sort of punted and said, ``Well, it just 
doesn't work.'' Well, there is no reason to think it doesn't 
work. If arbitration is as great as people like Mr. King say it 
is, then maybe some employees, consumers, student borrowers 
would choose it after a dispute arises. I don't think it is 
fair to simply say that it won't work and the only way to make 
arbitration work is to force it on an unknowing public.
    I will just continue to say that we are indeed forcing, 
companies are forcing these provisions on the public. So, 
Congresswoman, thank you again for your leadership on this 
issue. I think it is really important.
    Mr. Johnson of Georgia. The gentlelady's time has expired.
    With that, we will now hear from the gentlelady from 
Minnesota, Ms. Fischbach, for 5 minutes.
    Ms. Fischbach. Mr. Chair, thank you very much. I will yield 
my time to Congressman Issa for as much time as he may use.
    Mr. Issa. I thank the gentlelady. Having worked with Ms. 
Carlson for so long and watching what happened, I think all of 
us saw a terrible series of events that depicts a lot of what 
goes on behind closed doors, not just at her employer, but 
employers all over the country. Certainly, the so-called 
casting couch in Hollywood is famous for sexual harassment that 
went unreported for years.
    So, Ms. Carlson, let me ask a couple of questions in light 
of that. I am not trying to be harsh on you, but I just want to 
frame your situation versus so many people that find themselves 
in a similar situation. In your particular case, you had a 
contract with your employer, correct?
    Ms. Carlson. Yes, I did.
    Mr. Issa. You had renewed that contract at least once, 
right?
    Ms. Carlson. Yes.
    Mr. Issa. You were represented by attorneys when you 
negotiated that contract?
    Ms. Carlson. An agent, yes.
    Mr. Issa. Okay. So, you were a sophisticated negotiator, 
but you still found yourself with provisions that limited your 
ability to seek remedies when you were sexually harassed?
    Ms. Carlson. Exactly, and even with a Stanford and Oxford 
education, I did not understand the ramifications of 
arbitration when I signed the last contract when they put the 
clause in there.
    Mr. Issa. Well, having gone to Kent State, I am not going 
to badmouth Stanford. I am just not going to do it here.
    Let's go through a couple of things that are related to 
your case, but I think it may be part of the solution that we 
all need to look at in Congress.
    In your particular case, you made a decision rather than to 
sue your employer where you did have the nondisclosure and so 
on, you sued the individual who harassed you and attempted to 
get your day in court. Is that correct?
    Ms. Carlson. Correct, because there happened to be a law in 
the books in that particular State that allowed my attorneys to 
do that. That law does not exist anywhere else.
    Mr. Issa. So, to a great extent, since sexual harassment is 
by definition primarily an Act of somebody to somebody else, 
although it can include a company, if you will, culture, but 
the individual acts or individuals, if Congress viewed that as 
a right, a right to sue an individual that would not be and 
could not be placed in your employment contract with a company, 
that would have put you into a situation on a national basis 
where you would have had rights to go after the individual for 
their individual acts.
    Ms. Carlson. Potentially.
    Mr. Issa. So, as we are looking at remedies, is that a 
remedy that you would be maybe think a little bit about and 
opine on it at a later date? Because I would like your input 
because I do think that there is such a difference between what 
companies try to protect themselves from, which is often class 
action suits, versus both the secrecy that they are not 
entitled to and the individual acts that offer and protect. I 
will note that it is often protected at EPA, at OSHA, at 
government agencies because it's not just private corporations, 
but our Federal government and State governments often have 
rampant wrongdoing by individuals who are sheltered?
    Ms. Carlson. Yes, but I would just want to point out that 
this is pervasive across the board from every socio-economic 
class in every profession, which I didn't even know about until 
I filed my case. That is reason I didn't know about this is, 
because it is all in secrecy. I mean, that is why you don't 
know about it.
    Mr. Issa. Again--
    Ms. Carlson. I would also say that the companies have a 
huge responsibility to make sure that they are not allowing you 
this behavior to continue. As long as it can continue to go to 
secrecy, they are allowing it to be systemic. So, it is much 
more than just the individual.
    Mr. Issa. I want to join you in trying to stop the secrecy. 
I think we have certainly had hearings in the past on priests 
in the Catholic Church. I certainly think if we are going to go 
after individual priests, we need to go after individuals 
wherever they are.
    One last question for Mr. King, what is the, if you will, 
the history or the quantity of people who do have a choice to 
opt for arbitration, choosing to do so, both plaintiffs and 
defendants, both employers and employees, when that is an 
option? Is it chosen with a great deal of regularity and also 
mediation? Would you opine on the good of those programs?
    Mr. Johnson of Georgia. The gentleman's time has expired, 
but I will allow Mr. King to give a short answer to that 
question.
    Mr. King. There is a very heavy use of arbitration, 
mediation for represented employees. Under union contracts, it 
is pervasive. The same is true for nonunion employee 
situations. The usage factor has gone up considerably in the 
consumer area.
    Mr. Issa. Thank you. I thank the gentlelady from Minnesota 
for yielding.
    Mr. Johnson of Georgia. Thank you. I now recognize the 
gentlelady from Georgia, Ms. McBath, for 5 minutes.
    Ms. McBath. Thank you so much, Mr. Chair. Thank you to each 
of you that are here today. I want to start by being really 
crystal clear in what we are talking about today.
    The FAIR Act is about ending forced arbitration. My office 
is still being contacted by groups that are spreading so much 
misinformation. I want all my constituents, if they are 
listening today, the employees, the small business owners, and 
consumers that I represent, I want you to know this. Passing 
the FAIR Act is about making sure that you have a choice. It is 
about making sure our courthouse doors remain open to all as a 
place to seek justice.
    So, nothing in the FAIR Act will prevent you from seeking 
some other dispute resolution process, including arbitration, 
if you so choose that. It is critical that no one is forced out 
of court before their case, their claim, or their mistreatment 
even arises.
    So, now turning to you, Mr. Weiss, you built your business 
from the ground up, as you told us. In your written testimony, 
you said that before Amazon would let you sell anything on its 
marketplace, it forced you to sign what it calls a business 
seller agreement. You added that you had no ability to 
negotiate the terms of that agreement and no ability to sell on 
Amazon without signing that agreement. Can you explain--and you 
did kind of touch on this a little bit earlier, that you felt 
you were forced into signing the agreement, that you felt you 
didn't have really any leverage to reject the forced 
arbitration section of the contract. So, what do you think 
would have happened if in your outcome, if you agreed to accept 
all the terms in Amazon seller agreement, except for the forced 
arbitration provision?
    Mr. Weiss. Thank you, Congresswoman.
    There wasn't even such an option. It is a take it all or 
leave it all. So, I didn't even have an option to take any 
portion of the agreement out to be able to sell on Amazon.
    Ms. McBath. Thank you. Also, in your written testimony you 
said that forced arbitration puts third-party sellers in a 
lose-lose situation where they are left with a dismal choice of 
doing nothing in response to Amazon's wrongful actions or being 
subjected to the issues. How does it feel to be faced with a 
choice of doing nothing or continuing to be subject to the 
problems that you were facing? What effect does your inability 
to obtain any meaningful relief have on your business and your 
employees?
    Mr. Weiss. Not a very good effect. As I also mentioned in 
my testimony, there are many claims that we have experienced as 
a seller and I have discussed with other sellers, we have 
experienced very similar issues, but because of the financial 
component, we just had to accept that outcome without even 
having a way to rectify it because the cost of pursuing 
arbitration to right that wrong was going to be so much more 
expensive. It doesn't make financial sense. So, you just have 
to drop it and just live with all the issues that you have to 
deal with that are completely unfair and unjust.
    Ms. McBath. I sense that grave unfairness that you are 
speaking about. So, do you agree that the FAIR Act is necessary 
to stop the dominant companies, like Amazon, from facilitating 
and covering up any mistreatment of individuals in small 
businesses who are dependent on these companies for their very 
survival?
    Mr. Weiss. Absolutely.
    Ms. McBath. Well, thank you so much, and I yield back the 
balance of my time.
    Mr. Johnson of Georgia. The gentlelady yields back.
    At this time, I will now recognize the gentleman from 
Wisconsin, Mr. Fitzgerald, for 5 minutes.
    Mr. Fitzgerald. Mr. Chair, I do not have any questions at 
this time.
    Mr. Johnson of Georgia. Thank you. At this time, I would 
recognize the gentleman from Utah, Mr. Owens, for 5 minutes. 
Mr. Owens? Going once? Going twice?
    So, at this time, I will now yield to the distinguished 
Ranking Member of the Subcommittee, Mr. Buck, for 5 minutes.
    Mr. Buck. Thank you, Mr. Chair.
    Ms. Carlson, I want to visit with you about something, and 
I think that many of us agree that the area of sexual 
harassment is absolutely disgusting in terms of the scope and 
nature of it. Yet, I find this particular legislation to be 
sort of a one-size-fits-all. It applies to a contract with a 
credit card company, a contract with a wireless carrier. Yet, 
we have some really serious situations like sexual harassment 
that may be pulled out of--and I think the bill that you are 
actually advocating for and the bill that Ms. Stefanik is 
advocating for in the Republican Conference is a more limited 
area of this particular arbitration issue that we are trying to 
address.
    I think many of us would--and I want to ask Mr. King next 
to comment--but I think many of us are interested in finding 
discrete areas that are so important that we should ban 
arbitration clauses, do it in a fair way to the employer and 
the employee, but at the same time not burden the courts and 
create additional costs for corporations and businesses in 
America that are sometimes unnecessary and would really 
increase costs for cell phones and other things. Would you 
agree with that generally?
    Ms. Carlson. Well, Congressman Buck, I appreciate your 
comments and being willing to have an open discussion about 
this because, as I said earlier, this isn't a political issue. 
When somebody decides to harass you, they don't ask you what 
party you are in first, they just do it because it is really 
about power. That is what I have been advocating so much to 
bring the parties together to try and solve this issue.
    I would just say that the day that I found out what my 
arbitration clause meant was one of the darkest days of my life 
because my lawyers told me you don't have a case anymore. That 
was incredibly difficult to digest. I mean, if it hadn't been 
for their strategy to at least make my case public, I wouldn't 
be having this conversation right now. We arguably wouldn't be 
having this moment right now.
    So, I want to be clear that I would have still been forced 
into arbitration. My case would have been not settled.
    So, I really believe that we have no way of knowing how 
many women this has affected and how many have been forced out 
of the workplace. That is what is so concerning to me is that 
all the thousands of women who reached out to me, they had one 
common theme, which was they were silenced.
    Mr. Buck. I don't mean to interrupt you, but I want to make 
sure we talk about one other thing that I think is really 
important here. I find that the secrecy component of your 
testimony to be very disturbing. I think that when there is a 
predator in the workplace, that person should be outed, the 
company should be responsible and make sure that whatever line 
of business it is, that doesn't happen again. Avoiding secrecy, 
making sure that there is publicity one way of dealing with 
predators.
    The arbitration area is a little bit different than the 
secrecy area. I just want to make sure you recognize and are 
willing to tell people who are listening today that there is a 
difference between the secrecy and the arbitration. The secrecy 
is really what is so offensive to me. From your testimony--I am 
pointing to you--the arbitration we have got to find ways of 
dealing with. I think we can agree that there is no place for 
secrecy agreements when it comes to very, very serious conduct, 
like sexual harassment.
    Ms. Carlson. Yes. Secrecy is the central element. However, 
as I just read from my contract, that was part of the 
arbitration. There are other women that I know of right now 
that are in arbitration, which you never, ever hear--it is like 
they become invisible because they are not allowed to tell 
their story. That is how this problem continues.
    Mr. Buck. I think they can be separated. I have run out of 
time. Thank you very much for your testimony.
    I yield back.
    Ms. Carlson. Thank you.
    Mr. Johnson of Georgia. The gentleman yields back. I 
recognize myself for 5 minutes.
    Ms. Carlson, with the forced arbitration clause being 
buried in the fine print of your contract, would you have 
signed that contract if you had known that you were signing 
away your right to go to court for redress on your sexual 
harassment claim?
    Ms. Carlson. Never.
    Mr. Johnson of Georgia. Mr. Weiss, you have testified that 
you were forced into your agreement because there was no 
alternative, no alternative platform, and it was a take-it-or-
leave-it situation for you and that is why you ended up in 
arbitration. Is that correct? You need to unmute.
    Mr. Weiss. Sorry about that. Yes, Congressman, that is 
correct.
    Mr. Johnson of Georgia. Thank you.
    Mr. King, you stated in response to the 3\1/2\ minutes that 
Mr. Bentz gave you, you stated that corporations pay for the 
aggrieved person's lawyer if they need one. You also stated 
that the corporation pays for the arbitrator. When the 
corporation is paying for the arbitrator and the attorney for 
the claimant, is that possibly why, in arbitration, only 3 
percent of employees win their cases?
    Mr. King. Well, there are many reasons for the outcome. In 
court--
    Mr. Johnson of Georgia. Well, could it be that there is a 
setup, and the employer has paid for the result that they want, 
and they get that result?
    Mr. King. Absolutely not. Absolutely not, Congressman.
    Mr. Johnson of Georgia. Well, tell me this, Mr. King. What 
is so bad about allowing employees and consumers to choose 
whichever form of alternative dispute resolution, be it 
arbitration, be it mediation or litigation, why not leave it up 
to the parties to decide that, once the dispute arises, as 
opposed to burying the terms, a waiver of your constitutional 
right to a jury trial, burying that in the terms of an 
agreement on the front end? What is so wrong with giving people 
the right to do things fairly with knowledge of what they are 
doing?
    Mr. King. On the surface, that is a very appealing 
question. Mr. Chair, the fact of the matter is that they have 
those options today. In discrimination cases, they can file--
    Mr. Johnson of Georgia. So, when they have signed a 
contract that waives their right to go to court and they are 
bound to arbitration, how could they get out of that once they 
have signed the contract?
    Mr. King. Well, it depends on the fact pattern, Mr. Chair. 
As I was starting to say, if there is a discrimination case, 
individuals can file with a State or Federal agency such as the 
EEOC. There is no gag order. There is no confidentiality clause 
that would prohibit that. I mean, they have options today.
    The problem I am having with this conversation is, what is 
the alternative? Everybody on the panel, except for me, is 
saying arbitration doesn't work. Well, what is your 
alternative? Are you going to put everybody in the court 
system? No, that doesn't work. What I would respectfully 
suggest, is that perhaps we could have another hearing on 
judicial reform issues.
    Mr. Johnson of Georgia. Why doesn't it work?
    Why doesn't it work to go to an article III court created 
by the Framers of our Constitution as a means of protecting and 
preserving justice in this country? Why not go to court? What 
is wrong with that?
    Mr. King. Because you can't get to court, Mr. Chair, or you 
can't get there in an efficient way.
    Mr. Johnson of Georgia. Well, I will tell you something, 
Mr. King, it has been 30 years, 1990, since Congress expanded 
the Federal court system and created new judgeships.
    It has been 30 years, and you and I know that commerce has 
exploded; the global economy has expanded. There are more 
disputes, and the courts remain essentially with the same 
numbers that they had 30 years ago. Aren't you in favor of 
congressional action today that would expand the Federal 
judiciary and create more judgeships?
    Mr. King. Well, that is certainly an option--there are 
other options.
    Mr. Johnson of Georgia. Would you support that?
    Mr. King. Alternative dispute resolution--
    Mr. Johnson of Georgia. Would you support that, Mr. King?
    Mr. King. It depends on what else is in the package. I 
would want alternative dispute resolution procedures to be 
endorsed by this Committee and explored. I also would want 
Federal district court vacancies that are currently unfilled to 
be filled. I also would like to see a reformation of the 
discovery system that we have and the Rules of Civil Procedure. 
There is a lot that can be done to reform our current judicial 
system, Mr. Chair. I think we can reach consensus on that. So, 
there are a number of areas. Te answer is not just to eliminate 
predispute arbitration. You are going down the wrong path.
    Mr. Johnson of Georgia. All right. Thank you, Mr. King.
    I want to thank all our Witnesses for their appearances and 
for their testimony today. I seek unanimous consent to add a 
number of letters and statements into the record from 
organizations in support of ending forced arbitration and 
passing the FAIR Act. Statements for the record fromValerie 
Haney;one from Tanuja Gupta;a statement from Remington Gregg, 
counsel for Public Citizen;a letter for the record from 
Leadership Conference on Civil and Human Rights;a statement for 
the record from Heidi Silton, President, Committee to Support 
Antitrust Laws;a statement for the record from Chrissie 
Carnell-Bixler;a letter for the record from Consumer 
Reports;and a plaintiff brief in the case of Newton v. Hennessy 
Louis Vuitton.
    For the record, without objection, it is so ordered.
    [The information follows:]

    
                 MR. JOHNSON OF GEORGIA FOR THE RECORD

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    Mr. Johnson of Georgia. So, ladies and gentlemen, this 
concludes today's hearing. I want to thank you again for 
appearing as Witnesses.
    Without objection, all Members will have 5 legislative days 
to submit additional written questions for the Witnesses or 
additional materials for the record.
    With that, the hearing is adjourned.
    [Whereupon, at 12:42 p.m., the Subcommittee was adjourned.]
      

                                APPENDIX

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                 RESPONSES TO QUESTIONS FOR THE RECORD

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