Democrats in the U.S. House and Senate have unveiled legislation aimed at quashing the practice of compelling arbitration against a consumer’s wishes.
Rep. Hank Johnson (D-GA) and Sen. Richard Blumenthal (D-CT) announced their Forced Arbitration Injustice Repeal (FAIR) Act in March. The bill would eliminate such arbitration clauses in all employment, consumer and civil rights cases, but allow individuals to agree to arbitration after a dispute occurs, according to an announcement. The bill is supported by 147 co-sponsors in the House and 34 in the Senate.
“Forced arbitration agreements undermine our indelible constitutional right to trial by jury, benefiting powerful businesses at the expense of American consumers and workers,” Johnson said. “Americans with few choices in the marketplace may unknowingly cede their rights when they enter contracts to buy a home or a cellphone, place a loved one in a nursing home or start a new job. We must fight to defend our rights and re-empower consumers.”
Nursing home industry trade groups LeadingAge and the American Health Care Association did not have comment on the proposal in early March, as they had not yet reviewed it. Arbitration has been a long-favored tool for providers to resolve legal disputes. On average, nursing home claims that were resolved with arbitration closed two months faster, Aon found in a recent study. Its increased use in recent years, however, has caused an uproar in some quarters.
Lawmakers said they planned to introduce or reintroduce other measures tied to specific industries, including the Fairness in Nursing Home Arbitration Act. The White House Office of Management and Budget reportedly has been reviewing a final rule, which would reverse a ban on pre-dispute arbitration clauses for nursing home operators. A previous version of this reversal was met by opposition from both industry trade groups and resident advocates.
However, the OMB is marching forward with the new rule, which it says “strengthens requirements regarding the transparency of arbitration agreements in LTC facilities.”