Franken bill would block mandatory arbitration clauses in cell phone contracts

WASHINGTON — In response to a recent Supreme Court case upholding mandatory arbitration clauses in consumer agreements, like cell phone contracts, a group of Democratic lawmakers including Sen. Al Franken have introduced legislation that would largely reverse that decision.

Franken’s bill would prevent forced arbitration clauses in civil rights, consumer and employment cases, thus allowing consumers to always have a court option in disputes. 

He cited a recent Supreme Court decision, where the Court sided with AT&T in upholding a forced arbitration clause in a cell phone agreement. AT&T was the respondent in a class action lawsuit charging the telecom giant with deceptive advertising, but the Court held in a 5-4 decision that provisions in the Federal Arbitration Act extended to consumer-corporate contracts, thus throwing out the lawsuit.

“Workers and consumers should never be forced to give up their rights to get hired for a job, or to get a cell phone,” Franken said in a statement announcing his bill. “I’ve introduced the Arbitration Fairness Act to ensure that workers and consumers have the right to choose arbitration over litigation, instead of being forced into it by corporations.”

Though this legislation was introduced without any Republicans on board, Franken staffers said this was not just a piece of statement legislation (designed to make a point but go nowhere) and pointed out that he has a history of winning on forced arbitration bills.

In 2009, Franken shepherded through an amendment that blocked funding for defense contractors who include mandatory arbitration clauses that include sexual assault in their employment agreements. Republicans who opposed that bill when it first came up for a vote were hammered in the court of public opinion, and the measure eventually was included in the must-pass Defense bill.

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Comments (1)

  1. Submitted by Ji-Sook Yim on 05/27/2011 - 11:10 am.

    Consumers aren’t better off without this mandatory arbitration – it’s only good for the giant corporations. Check out our blog post for another opinion about the Franken bill:

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