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When students learn about our system of justice in civics class, they’re told that every American has a right to his or her day in court. Yet, people from all walks of life often unknowingly sign away their right to a trial when they sign a contract.
This happens to people every day, and in many cases they don’t even realize it, because they agree to something known as “mandatory arbitration” that’s buried deep in a cell phone contract or in an HMO or credit card agreement.
Sometimes consumers only find out they’ve given up their right to trial when a big company forces them to take a dispute to a private arbitration company instead of going through the court system. Arbitration has some serious downsides for consumers, including high administrative fees. It also lacks discovery proceedings and other due process protections, and meaningful judicial review of arbitrators’ decisions.
There’s nothing fair about some of the arbitration proceedings that consumers are forced into. A major arbitration firm actually advertised its services by pointing out how arbitration favors its corporate clients because arbitrations are secret, and consumers or employees have very limited rights to discovery and might even have to pay the costs of the arbitration if they lose.
Arbitration should be a choice, not a mandate. It is only an adequate alternative to the courts in cases when both sides are willing participants. That is why I introduced legislation to prevent Americans from being forced to agree to arbitrate employment, consumer, franchise, or civil rights disputes. This will ensure Americans who participate in arbitration of these kinds of disputes are doing so voluntarily.
In addition to pursuing comprehensive legislation, I am also working on more targeted bills to start giving more and more Americans the choice of whether to enter into arbitration. In agriculture, we have to prevent large purchasers from taking advantage of small farmers by insisting on mandatory arbitration provisions in their contracts.
I authored a bill with Sen. Chuck Grassley, R-Iowa, to prevent mandatory arbitration in agriculture contracts, and I was pleased the measure easily passed the Senate Judiciary Committee. We were also able to include a provision in the Farm Bill to give farmers the option to opt in or out of any mandatory arbitration clause. This measure will help ensure small farmers cannot be taken advantage of by large corporations that purchase their products.
Across every sector of our economy, Americans are being strong-armed into this consumer-unfriendly system. The rule of law means little if the only forum available to those who believe they have been wronged is an alternative, unaccountable system. We must make sure that all Americans can still have their day in court.
Russell Feingold is the junior senator from Wisconsin.
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