We won some enormous victories this week in our quest to end mandatory binding arbitration.
The amendment of Sen. Al Franken (D-Minn.) to prohibit federal contractors from requiring their employees (or subcontractors) from signing mandatory arbitration clauses sailed through a conference committee unscathed and appears destined to become law.
As we have reported extensively, Halliburton has gone to great lengths for prevent one of its former employees, Jamie Leigh Jones, from pursuing damages in court for being raped on company property by other Halliburton workers. The company is trying to force Jones to try her case in front of an arbitration firm of its choosing.
Also, we are making tremendous progress toward ending the credit card companies’ practice of using arbitration mills to win legal judgments against their employees. Rep. Dennis Kucinich (D-Ohio) announced yesterday that six banks have agreed to drop forced arbitration from their credit card agreements.
"Today I can announce that six of those banks will not have arbitration clauses in their new credit card agreements," Kucinich wrote in a statement. "Those banks are JPMorganChase, CapitalOne, PNC Bank, TD Bank, Bank of America and Regions Bank. I want to congratulate those banks for their decisions."
But Kucinich noted that only two of the banks, JPMorgan and CapitalOne, will permit their customers to resolve disputes in front of juries. So there’s still work to do to restore our constitutional rights.
These victories come just a little more than two years since we released "The Arbitration Trap," which showed that credit card companies win more than 94 percent of their cases in arbitration. Six months after that report was released, San Francisco’s city attorney filed a lawsuit against the National Arbitration Forum (NAF) using much of its data, which made the cover of BusinessWeek. The dam broke in July of this year when Minnesota Attorney General Lori Swanson sued the NAF. Swanson’s case was so devastating that NAF signed a consent decree within a week agreeing to end its massive consumer arbitration business. Taking heed of a warning it received from Swanson, the American Arbitration Association agreed to a moratorium on accepting debt collection cases.
Still, the battle over credit card arbitration is likely to continue. Bank of America’s tentative settlement, for example, agrees only to a three and a half year halt. And even if we can shape up the credit card companies, we still have work to do to end the use of arbitration in contracts for home building, employment, franchises, and many more.