Senate Democrats are pressing President Obama to take action to protect consumers’ right to settle disputes with companies in court.
In a letter this week, Sens. Al Franken (Minn.), Patrick Leahy (Vt.) and 14 other Democrats asked the president to undertake an administration-wide review of clauses, slipped into contracts for products such as cellphones and credit cards, that preempt a person’s ability to sue a company.
{mosads}“These clauses, which are often buried in the fine print of employment and consumer contracts, severely restrict Americans’ access to justice,” their letter said. “We strongly support legislative and regulatory efforts to eliminate forced arbitration clauses, and commend your own advances on this critical issue. But we believe that more must be done.”
The letter is in response to a New York Times investigation late last month exposing the dangers of the practice known as “forced arbitration” that strips consumers’ of their right to challenge disputes in court and file class-action lawsuits. The clauses typically state that disputes about a product can only be resolved privately by arbitrators that are typically appointed by the company.
Sens. Franken and Leahy are the leading authors of the Arbitration Fairness Act introduced in April. The bill would make arbitration agreements unenforceable in employment, consumer, antitrust or civil rights disputes.
The senators commended the Department of Justice’s legislative proposal, announced on Veterans Day, to make arbitration clauses unenforceable against service members with claims arising under the Civil Relief Act, which suspends certain obligations, such as paying outstanding credit card debts, for those who are entering the military, called to active duty or deployed.
Franken and Leahy said other agencies should be able to use their control of federal funds as a means of prohibiting forced arbitration clauses.