Forced Arbitration Injustice Repeal Act Introduced In Congress

Late last month Congressman Jerrold Nadler and Senator Richard Blumenthal announced that they were introducing the Forced Arbitration Injustice Repeal Act, or FAIR Act.  If passed, the FAIR Act would end the use of forced arbitration in consumer, employment, civil rights, and antitrust disputes.

Currently, millions of Americans are forced to sign binding arbitration agreements just to obtain employment, open a bank account, or buy basic products.  They sign away their rights before they have any experience with an employer, bank, or seller.  Many of them never notice the arbitration clause buried within their agreement.  And, unfortunately, studies have found that employees and consumers are less likely to win their cases in arbitration than they are in court, and when they do win they obtain smaller recoveries.[1]

The attorneys at Finkelstein, Blankinship, Frei-Pearson, & Garber, LLP (“FBFG”) have been at the forefront of fighting forced arbitration.  For example, in Lowell v. Lyft, Inc., No. 17-06251 (S.D.N.Y.), we successfully defended against the defendant’s attempt to force into arbitration people who the defendant had allegedly pervasively and systematically excluded from its transportation service because of their disabilities.  The court ruled for the plaintiffs, explaining that it would be manifestly unjust to force them into arbitration based on a small arbitration clause buried within the terms of service.

In Wasko v. Smart & Final Stores, LLC, No. 2017-00224484 (Cal. Super. Ct.), the defendant attempted to compel arbitration of the plaintiff’s claims that the defendant had required him and other employees to work off the clock without pay in violation of the California Private Attorneys General Act, Cal. Labor Code §§ 2698, et seq.  (“PAGA”).  FBFG successfully argued that PAGA claims could not be forced into arbitration regardless of whether or not the plaintiff had signed an arbitration agreement.

In Barkley v. Pizza Hut of America, Inc., No. 14-00376 (M.D. Fla.), delivery drivers sued the defendants for allegedly paying them less than the minimum wage once their work related expenses were taken into account.  The defendants moved to compel the plaintiffs to arbitrate their claims, arguing that they must have signed arbitration agreements because the defendants had a practice of having all of their employees sign arbitration agreements.  FBFG successfully argued that the company could not force the plaintiffs into arbitration based on the defendants’ unfounded assumption that they had signed arbitration agreements.