[Congressional Record Volume 162, Number 21 (Thursday, February 4, 2016)]
[Senate]
[Pages S672-S673]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself, Mr. Franken, Mr. Blumenthal, Mr. 
        Durbin, and Mr. Whitehouse):
  S. 2506. A bill to restore statutory rights to the people of the 
United States from forced arbitration; to the Committee on the 
Judiciary.
  Mr. LEAHY. Mr. President, I rise to discuss legislation I am 
introducing today to protect workers and families in Vermont and across 
the country who are being forced to give up crucial rights because of 
legal fine print forced on them by corporations.
  The Restoring Statutory Rights Act combats the injustice of forced 
arbitration. It will ensure that hardworking men and women can 
vindicate their rights in court instead of being forced into a private, 
shadow justice program. Some of the contracts people sign 
automatically, with little, tiny type, say: If we overbill you, if we 
give you defective equipment, if we do anything to you, it will go to 
arbitration. Guess what. The only people who primarily get to pick the 
arbitrators are those who side with the corporations.
  Mr. President, I am introducing this legislation on behalf of myself, 
Mr. Franken, Mr. Blumenthal, Mr. Durbin, and Mr. Whitehouse.
  Today I want to speak about a problem that many Americans are unaware 
of but that affects all of us in our daily lives. When Americans sign 
cell phone agreements, rent an apartment, or accept a contract for a 
job, most of us focus on the service we are about to receive or that we 
are about to provide. What Americans do not realize--until it is too 
late--is that too often we are also signing away crucial legal rights. 
Legal fine print tips the scales against us. It is forcing consumers 
into private arbitration, denying us of our constitutional right to 
protect ourselves in court and to have others learn about the harm 
caused by corporations.
  This problem has meaningful, real-world implications for Americans' 
ability to seek justice. When victims are forced into private 
arbitration, their cases proceed without public record. The cases 
cannot serve as precedent for future injustices, and the plaintiffs--
hardworking consumers--cannot obtain a meaningful appeal. An arbitrator 
is selected by the corporate defendant, creating incentives that favor 
repeat corporate players. In many cases, forced arbitration stops 
victims' legal actions altogether: by requiring victims to waive their 
legal right to join with other victims in a class action, arbitration 
clauses often remove the crucial tool that plaintiffs need to afford 
pursuing their claims.
  The injustice of forced arbitration affects consumers, workers, 
seniors, veterans, and families in every State across the country. The 
cases are heart-wrenching. In one recent case, a pregnant woman 
suffered a tragic miscarriage and was not able to work for 7 days. When 
she returned to work, she was fired. When this woman attempted to hold 
her employer accountable in court for violating the Family and Medical 
Leave Act and her State's pregnancy discrimination laws, her case was 
forced into private arbitration. We do not know the outcome of the 
case, but that is precisely the problem. In private arbitration, there 
is no way to know if she obtained justice, no precedent to deter other 
employers from such behavior, and no public accountability for the 
corporation that may have violated both State and Federal law.
  In another recent case, an hourly employee at a hospital realized she 
was not being paid for all of the time she worked because her 
employer's payroll system was ``rounding down'' her time. When she 
attempted to bring a class action on behalf of all the hourly employees 
at the hospital, her lawsuit was dismissed and forced into individual 
arbitration. To seek justice, the hospital employees must now pay to 
bring their complaints case-by-case, even though the cost of bringing 
an individual arbitration almost certainly outweighs the lost wages any 
worker would receive.
  Forced arbitration has also been a favorite tool for well-heeled 
corporations to make an end-run around our civil rights laws. When 
working women are paid less for doing the same job; when minorities are 
denied promotions despite their success; or when banks target poor 
minority neighborhoods with predatory loans, the closed and 
unaccountable forum of private arbitration lets them conceal their 
discriminatory actions.
  This system of forced arbitration denies individuals access to 
justice. But it also guts vital protections we have fought for in our 
laws. Whether we are talking about family and medical leave, equal pay, 
or crucial civil rights protections, what strength do our laws have 
when the legal process Congress created to enforce them is stripped 
away without recourse? Through legal fine print, corporations are 
giving themselves a ``get out of jail free'' pass that guts citizens' 
rights and shields bad actors from accountability.
  When Congress passed the Federal Arbitration Act, it was intended to 
give sophisticated businesses an alternative venue to resolve their 
disputes. There is a valid role for arbitration when parties choose it 
willingly, after a dispute arises, as an alternative to court. But 
arbitration should not be forced upon consumers and workers through 
take-it-or-leave it contracts they have no real choice but to accept. 
And it should not--it must not--prevent Americans from enforcing their 
rights under fundamental State and Federal laws.
  Nor should Federal law interfere when States take action to address 
the injustice of forced arbitration. A full 47 of our 50 States have 
tried to protect their citizens in some way from forced arbitration, 
but these efforts have been thwarted by Federal law. In Vermont, 
lawmakers required that arbitration clauses be accompanied by a written 
acknowledgement signed by both parties, to ensure that consumers were 
aware of them. This reasonable, commonsense requirement was invalidated 
because it conflicted with Federal law.
  Following a 2011 Supreme Court case, AT&T v. Concepcion, other 
efforts in Vermont and across the country to protect citizens from 
forced arbitration have also been invalidated. Vermonters who tried to 
sue their phone service provider for disturbing them with unwanted text 
messages and Vermont drivers who tried to sue their car insurers over 
coverage have all been forced into private arbitration despite 
conflicting measures in Vermont law. This restriction on States' 
authority is wrong, especially when the enforceability of contracts is 
traditionally an area left to State law. This is not a partisan issue. 
Both Republican and Democratic attorneys general have repeatedly spoken 
out against the Federal Arbitration Act's intrusion on State 
sovereignty and a State's compelling interest in protecting the health 
and welfare of its citizens.

[[Page S673]]

  Congress must act to stop these abuses. That is why today I am 
introducing legislation to limit the injustice of forced arbitration 
and protect Americans' right to seek justice in our courts. The 
Restoring Statutory Rights Act will ensure that critical State and 
Federal laws can actually be effective, by ensuring that citizens 
cannot be stripped of their ability to enforce their rights using our 
independent justice system. It will also ensure that when States take 
action to address forced arbitration, they are not preempted by an 
overbroad reading of our Federal arbitration laws.
  This effort is supported by the Leadership Conference for Civil and 
Human Rights, the National Employment Lawyers' Association, Americans 
For Financial Reform, Alliance for Justice, Earthjustice and consumer 
groups such as Consumers Union, Public Citizen, the National Consumer 
Law Center, and Consumers for Auto Reliability and Safety. These groups 
and many others have worked tirelessly to highlight the injustice of 
forced arbitration and the unparalleled scope and number of people it 
affects.
  All Senators should care about the implications of forced arbitration 
for statutes that this body writes, debates, and enacts into law. 
Senators should also care about their home States' ability to protect 
consumers from unconscionable contracts when their State chooses to 
act. I urge Members to support this bill.
  Mr. LEAHY. Mr. President, I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. FRANKEN. Mr. President, I rise today to discuss the widespread 
and harmful impact of forced arbitration--mandatory arbitration. Last 
November, the New York Times published a three-part investigative 
series, which I recommend to every Member, on the pervasive use of 
forced arbitration--or mandatory arbitration. Mandatory arbitration is 
a privatized system of justice that corporations rely on when their 
customers or workers seek justice for being cheated, injured, or 
mistreated.
  The series in the New York Times, while shocking, illustrates 
something that I have been saying for a long time: Mandatory 
arbitration agreements--forced arbitration agreements, which are often 
buried in the fine print of employment and service contracts, severely 
restrict Americans' access to justice by stripping consumers and 
workers of their legal rights and insulating corporations from 
liability. From nursing home contracts and employment agreements to 
credit card and cell phone contracts, corporate America uses forced 
arbitration clauses to rig the system against ordinary Americans in a 
wide variety of cases.
  My staff recently heard from a Minnesota lawyer who represents 
families with serious injury and wrongful death claims. He told the 
heartbreaking story of a man who suffered from dementia and was 
eventually checked into a nursing home. Twenty-one days after entering 
the home, it became clear to the man's family that his life was in 
danger; he was rapidly losing weight and had fallen into a coma. He was 
then sent to a hospital, where it was discovered that he was suffering 
from ``profound dehydration.'' Unfortunately, the hospital could not 
correct the harm caused by the nursing home, and the man died shortly 
thereafter. He was 71 years old. Then, instead of being able to take 
the nursing home to court, the man's family was forced to settle their 
wrongful death claim through arbitration. When all was said and done, 
the arbitrators actually received greater compensation than the family, 
and the nursing home got away with a slap on the wrist.
  Egregious cases like that of this Minnesota family are not rare. Time 
and again, arbitration clauses stack the deck in favor of big business 
and against consumers, as if the deck weren't stacked enough already. 
As the number of unbelievable stories grows, the need for reform has 
become clearer and more urgent. That is why I am proud to be joining 
Senator Leahy, as well as Senators Blumenthal, Durbin, and Whitehouse, 
in introducing the Restoring Statutory Rights Act to ensure that 
Americans can enforce their civil rights.
  As Members of Congress, we have fought hard to pass legislation that 
will protect Americans from discrimination. This critical work is 
undermined, however, if we strip away their right to go to court and 
instead force these claims into a privatized justice system.
  Remember that corporations can write the rules for the arbitration 
proceedings; everything can be done in secret, without public rulings; 
discovery can be limited, making it hard for consumers to get the 
evidence they need to prove their case; and there is no meaningful 
judicial review, so there is not much a consumer or an employee can do 
if the arbitrator gets it wrong. It is simply not fair.
  I have also introduced with a number of colleagues my own bill, the 
Arbitration Fairness Act, which would fix these unfair practices by 
amending the Federal Arbitration Act to prohibit the use of mandatory, 
predispute arbitration agreements in consumer, employment, civil 
rights, and anti-trust cases. This bill gives Americans a real choice: 
If a consumer or worker wants to take his claim into arbitration, then, 
by all means, he is free to do so, provided that the corporation is 
willing to do so as well. However, if the consumer or employee wants to 
go to court, that option will once again be available.
  To put it simply, both of these bills are about reopening the 
courthouse doors to American consumers and workers, because the 
courthouse doors never should have been closed in the first place.
  I ask others to please join me in fighting back against mandatory 
arbitration and cosponsor the Restoring Statutory Rights Act and the 
Arbitration Fairness Act.
  Mr. President, I yield the floor.

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