Google Employees Push for Legislation to End Forced Arbitration in Employment Contracts

Google employees are organizing a phone drive that will take place on Wednesday, May 1st to press lawmakers into supporting The Forced Arbitration Injustice Repeal (“FAIR”) Act. The FAIR Act is an initiative recently reintroduced in the House of Representatives seeking to end the use of arbitration agreements in employment contracts so as to sidestep public trials. Widely used across many industries, these clauses are inserted into workers’ contracts more and more frequently to require that the workers waive their right to sue their employers in a real and public court. Instead, employee complaints are funneled into a private legal system, where employers (who fund the system) are viewed as having the upper hand in the settling of job-related disputes. [Read more…]

Mandatory Arbitration Clauses Should Be Banned From Insurance Policies

Mandatory Arbitration Clauses Should Be Banned From Insurance Policies

Formal amendment to the Model Unfair Trade Practices Act seeks to prohibit pre-dispute forced arbitration provisions

According to Insurance Business America, pretty much everyone except big business hates forced dispute arbitration, a diversion of adjudication from open courts to closed, one-sided panels that has been shoved down the throats of consumers across nearly every industry. “Over the last 10 to 15 years, the practice of requiring individuals to agree to arbitrate rather than litigate any future disputes (or forgo the product, service or employment altogether) has been heavily criticized by government agencies, the media, academics and consumer groups.” [Read more…]

Seeking an End to Forced Arbitration in Sexual Harassment Cases

Seeking an End to Forced Arbitration in Sexual Harassment Cases

On December 6, sexual harassment survivor and former Fox News host Gretchen Carlson joined several members of Congress in unveiling new legislation restoring the rights of sexual harassment survivors to hold their workplace abusers publicly accountable in court. Although workplace sexual harassment violates Title VII of the Civil Rights Act of 1964, corporations use forced arbitration provisions in employment contracts and handbooks to silence women and cover-up the illegal behavior of abusers. This bipartisan, bicameral legislation aims to restore workers’ rights by putting an end to the abusive practice of forced arbitration in workplace sex discrimination claims and ensuring every survivor of sexual harassment has a chance to fight for justice in court. [Read more…]

Senate Denies Consumers the Right to Sue Banks and Other Companies

Senate Denies Consumers the Right to Sue Banks and Other Companies

The U.S. Senate has voted to repeal a rule banning banks and credit card companies from forcing defrauded consumers into non-trial private arbitration. As reported on Yahoo! Finance, “The Consumer Financial Protection Bureau, which was built out of the financial crisis, created the rule after five years of studying forced arbitration clauses, the fine print inserted by companies to insulate them from lawsuits, instead sending them to arbitration.” [Read more…]

CFPB Under Big Bank Attack for Upholding Consumers’ Rights

CFPB Under Big Bank Attack for Upholding Consumers' Rights

The Huffington Post has published an important op-ed piece by Paul Bland, Executive Director of Public Justice, about the banking industry’s increasingly dishonest and desperate attacks on the Consumer Financial Protection Bureau’s new forced arbitration ban that is intended to allow consumers to be able to work together via class action lawsuits to defend their rights in the face of fraud and predatory practices by banks. The banks want the rule destroyed so that they can be left unaccountable for the kinds of fraud and predatory actions that have made recurrent and shocking headlines over the last several years. [Read more…]

New York Times Op-Ed: “Let Consumers Sue Companies”

Scam Fraud Consumer Rights

A powerful op-ed published this week in the New York Times examines recent workings in the House and Senate to fundamentally undermine consumer rights in the United States. The Consumer Financial Protection Board recently created a new rule preventing companies from denying consumers the right to band together and go to court when they are treated unfairly. The rule would act to keep companies from restricting consumer recourse to binding, closed-door arbitration outside the courts and sidestepping the judicial system. [Read more…]

New CFPB Rule to Ban Companies From Using Arbitration Clauses to Block Class Action Lawsuits

New CFPB Rule to Ban Companies From Using Arbitration Clauses to Block Class Action Lawsuits

The Consumer Financial Protection Bureau (CFPB) has issued a new rule that will prevent companies from including language in arbitration agreements that would keep consumers from filing class action lawsuits. While companies can still mandate arbitration (as opposed to individual lawsuits) to resolve consumer disputes, they can no longer force consumers to surrender their rights to bring collective group actions when the conduct complained of affects many consumers in a similar fashion. [Read more…]

Senators Accuse AT&T of Using Forced Arbitration to Overcharge Customers

AT&T Allegedly Using Forced Arbitration to Overcharge Customers

Five U.S. senators claim major telecommunications company AT&T is utilizing forced arbitration clauses in order to sidestep its customers’ efforts to get justice for claims of rampant overcharging. The Dallas-based company allegedly charges consumers for AT&T services at rates significantly higher than those originally offered in a wide range of advertised promotions, then forces customers seeking redress into unfavorable mandatory arbitration. [Read more…]

Lieff Cabraser Files Amicus Brief on Behalf of Public Justice in Uber Forced Arbitration Case

Lieff Cabraser Files Amicus Brief in Support of Public Justice in Uber Forced Arbitration Case

As reported by Law360, Public Justice (represented by Lieff Cabraser) has filed an amicus brief in the U.S. Court of Appeals for the Second Circuit urging the affirmation of the district court’s decision denying a motion to compel arbitration in a consumer lawsuit against the Uber ride-sharing service. In the case, Uber seeks to impose mandatory arbitration requirements on consumers — contract terms of which they had no notice and to which they did not affirmatively agree. The brief notes that this is not only contrary to longstanding law, but also fundamentally unfair: Companies should not be permitted to force consumers making online transactions to abide by terms to which they do not agree, simply because those terms are available elsewhere online. [Read more…]

Consumers Overwhelmingly Want Access to Legal System Currently Denied by Major Banks

Bank Misconduct

A 2016 study by The Pew Charitable Trusts notes that consumer disputes with banks over fees and policies are on the rise. Of particular concern are mandatory arbitration clauses found in 90% of bank account agreements. These forced arbitration provisions steer consumers to third-party decision-makers whose decisions are usually binding, giving the consumer limited or no opportunity to appeal. Such provisions also prohibit consumer bank customers from seeking any remedy in an impartial court of law. [Read more…]

Judge Rakoff Calls Consumer “Consent” to Online Arbitration Agreements a Legal Fiction

Scales of Justice in courtroom

In a court ruling regarding alleged Uber price-fixing, U.S. District Judge Jed Rakoff states in no uncertain terms that when it comes to online arbitration agreements, consumer consent is nothing more than a “legal fiction.” [Read more…]

Forced Arbitration Steals Consumers’ Rights

Forced Arbitration Steals Consumers’ Rights

Lieff Cabraser partner Mark P. Chalos has written an article for The Tennessean discussing the mandatory arbitration clauses hidden in an astonishing number of financial service and product contracts that ultimately deprive consumers of their basic constitutional rights to justice when something goes wrong. Chalos’ “Forced Arbitration Steals Consumers’ Rights” piece also signals a call to action for consumers to voice their opinions to federal and state legislators now, during open review of the Consumer Financial Protection Bureau’s (CFPB) newly proposed rules. [Read more…]

Public Comment Period on Proposed U.S. Agency Rules to Stop Corporate “Contract Gotchas” Begins

Public Comment Period on Proposed U.S. Agency Rules to Stop Corporate ‘Contract Gotchas’ Begins Today

In a move intended to level the playing field between the American public and corporations with regard to contract disputes on financial products, the U.S. Consumer Financial Protection Bureau (CFPB) proposed new rules this month that would limit corporations’ ability to force citizens away from the court system and into mandatory arbitration. Proposed new rules by U.S. agencies like the CFPB trigger a statutory 90-day public comment period, and for these new rules that period began on May 24, 2016. [Read more…]

CFPB Rule Proposes to Modify Mandatory Arbitration Clauses in Favor of Consumers

CFPB Rule Proposes to Modify Mandatory Arbitration Clauses in Favor of Consumers

The Consumer Financial Protection Board (CFPB) has proposed a new rule that would modify mandatory arbitration clauses and, ultimately, restore consumers’ fundamental right to class action courtroom trials against financial institutions. In the new proposal, while financial institutions may still impose a requirement of having individual disputes handled by private arbitration, class action lawsuits are no longer forbidden. [Read more…]

Elizabeth Cabraser Comments on New CFPB Proposal Regarding Arbitration Clauses

Judge's Gavel

The federal Consumer Financial Protection Bureau (CFPB) proposed a potentially transformative new rule on Thursday regarding forced arbitration agreements that strip consumers of financial products of their basic constitutional rights. If approved, the proposed rule will bar financial institutions like banks and credit card companies from using forced arbitration clauses to prevent consumers from filing class action lawsuits. These clauses left consumers with no court options and locked them into unbalanced private arbitration to their widespread detriment. [Read more…]

New Rule from Consumer Financial Protection Bureau Would Restore Consumers’ Rights to Collective Action Against a Predatory Financial Industry

Banks Get Boot from Forced Arbitration

If the new Rule is approved, banks will no longer be able to use forced arbitration clauses to ban consumers from joining together in class action lawsuits, seen as most effective consumer option in fighting illegal practices

After an extensive new study that conclusively proved how unfair and destructive fine print “forced arbitration” clauses have been for consumers, the Consumer Financial Protection Bureau (“CFPB”) has issued a new rule forbidding banks from forcing consumers into non-trial unbalanced arbitration hearings as their only recourse when a bank has cheated them. If approved, this landmark rule will be a huge gain for consumers, who have been suffering from bank schemes and illegal manipulations without any real means to fight back. [Read more…]

War on Consumer Protection: How the Enforcement of Consumer Laws Falls Under Attack

War on Consumer Protection: How the Enforcement of Consumer Laws Falls Under Attack

As mandatory arbitration clauses become more prominent within company contracts, “attempts to protect businesses at the expense of consumers are underway,” according to an opinion piece by law professor Jeff Sovern published by USA Today. Consumer laws have historically been enforced in two ways – through the government and via lawmakers. [Read more…]

Hidden Arbitration Contract Clauses Restrain Consumers’ Constitutional Rights

Hidden Arbitration Clauses Restrain Constitutional Rights

A specter is haunting consumer contracts. In the last few years, there has been a veritable explosion of forced arbitration clauses thrust into contracts in industries ranging from banking to insurance, medical to retirement care. GrubHub food delivery service just updated their user agreement to force their customers into mandatory arbitration over any disputes that might arise as a result of their using the service to get Chicken Masala or local pizza. This routine addition to many companies’ dealings with customers has resulted in the deprivation of consumers’ basic constitutional rights, as these forced arbitration agreements require individuals to give up certain fundamental legal protections, including the right to a fair court trial in front of a neutral judge.

[Read more…]

New York Times’ Seminal Expose of the Dangers and Rights Erosion of Forced Arbitration Continues

Forced Arbitration Dangers

The New York Times continues its extraordinary series on forced arbitration in the U.S. and how contracts mandating arbitration in place of a hearing in a courtroom are stripping us of our most basic rights. The most recent piece, “Pivotal Nursing Home Suit Raises a Simple Question: Who Signed the Contract?” addresses the plight of a family whose matriarch was murdered in her nursing home by her patient-roomate, but who cannot get justice or any accountability by the nursing home.

[Read more…]

New York Times Editorial: Arbitrating Disputes, Denying Justice

Arbitrating Disputes, Denying Justice

“In recent years, America’s corporations have created a private system for handling disputes that benefits them greatly while denying consumers their day in court.” So states the Editorial Board of The New York Times in a follow-up to their groundbreaking three-part expose on forced arbitration clauses shunting consumer disputes into often-unbalanced negotiation outside any court of law. [Read more…]