[Congressional Record Volume 163, Number 39 (Tuesday, March 7, 2017)]
[Senate]
[Page S1642]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself, Mr. Franken, Mr. Blumenthal, Mr. 
        Durbin, Mr. Whitehouse, Mr. Markey, Ms. Warren, Mrs. Murray, 
        Ms. Baldwin, Ms. Heitkamp, Ms. Hirono, Mr. Brown, Mr. Booker, 
        and Mrs. Shaheen):
  S. 550. 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, today, I have reintroduced legislation to 
protect Americans from being stripped of their legal rights by little 
known clauses that are now hidden in an alarming number of contracts. 
When we enter into agreements to obtain cell phone service, rent an 
apartment, or accept a new job, most are not made aware of the forced 
arbitration clauses that are tucked away in the legal fine print. But 
these dangerous provision force us to abandon our constitutional right 
to protect ourselves in court and instead send hard-working Americans 
to face wealthy corporations behind closed doors in private 
arbitration. This must change.
  When Congress passed the Federal Arbitration Act in 1925, it was 
intended to help businesses resolve legal disputes with each other. But 
over the past two decades, private arbitration has been abused by large 
companies to push Americans out of court. In doing so, these companies 
have effectively opted out of critical labor, consumer, and civil 
rights laws that give Americans the ability to assert their claims 
before our independent judiciary.
  Forced arbitration clauses now appear in nearly every contract we 
sign. Unfortunately, examples of the injustice caused by these clauses 
are equally ubiquitous and can be found all across the country. They 
affect consumers, workers, seniors, veterans, and families in Vermont 
and every other State, and the cases are heart-wrenching.
  Just last week, the Washington Post reported that hundreds of current 
and former employees of Sterling Jewelers--a company that earns $6 
billion in annual revenue--have for years alleged that the company is 
engaged in pervasive gender discrimination and has fostered a culture 
that condones sexual harassment. The stories now being reported are 
shocking and date back to the early 1990s. Yet, despite the fact that 
women at the company have been alleging misconduct for decades, no one 
knew about it. That is because their claims were hidden behind closed 
doors because of private arbitration. To this day, we still do not know 
the full details.
  The press has helped to bring attention to other instances of forced 
arbitration in recent years. In 2015, the Los Angeles Times revealed 
that Wells Fargo used arbitration clauses to deny customers whose names 
were used to open fraudulent accounts an opportunity to seek justice in 
court. In fact, Wells Fargo asked a Federal court in Utah to move a 
number of sham account allegations to arbitration. The New York Times 
dedicated a three-part investigative series to highlighting the impact 
on consumers and workers of forced arbitration clauses. And becoming 
the story herself, television journalist Gretchen Carlson was barred 
from speaking publicly about her allegations of sexual harassment 
against former FOX News chairman Roger Ailes.
  I have long raised concerns about the practice of forced arbitration, 
and as chairman led hearings of the Senate Judiciary Committee in 2007, 
2008, 2011, and 2013. This should not be 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. In Vermont, lawmakers enacted commonsense legislation 
to limit the abuse of forced arbitration clauses and raise consumer 
awareness, but but this law was invalidated because it conflicted with 
Federal law. Companies have effectively created a ``get out of jail 
free'' card that guts our laws and shields bad actors from any type of 
public accountability. This is an unconscionable situation, and 
Congress must act.
  The Restoring Statutory Rights Act that I am reintroducing today/will 
protect Americans' right to seek justice in our courts. It will ensure 
that our Federal laws will actually be effective by ensuring that 
Americans cannot be stripped of their ability to enforce their rights 
before our independent court system. This bill also ensures that when 
States act to address forced arbitration, as my home State of Vermont 
has, 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, and 
consumer groups such as National Association of Consumer Advocates, 
Consumers Union, Public Citizen, the National Consumer Law Center, and 
Consumers for Auto Reliability and Safety. For years, these groups and 
many others have worked tirelessly to highlight the injustice of forced 
arbitration and the full scope of the number of people it affects.
  All Senators should care about ensuring that corporations cannot 
unilaterally circumvent the statutes that this body writes, debates, 
and enacts into law. Senators should also care about the ability of the 
States to protect consumers from unconscionable contracts. I urge 
Members to support this bill.
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