Published: May 2013

Forced arbitration clauses cruel and unjust for workers

Coalition: The Fair Arbitration Now coalition

Consumer Action joins coalition members in opposing H.R. 1773, a bill that aims to deprive agricultural guest workers of their access to legal assistance.

Forced arbitration clauses, hidden in the fine print of many types of consumer and employment contracts, are an unjust practice that Congress should eliminate. These clauses force America’s workers and consumers into privatized legal proceedings where the corporation chooses the arbitrator, the venue, and the rules governing the process. These arbitrators view the corporations as their “clients,”  and depend on them for repeat business,  which leads to biased decisions against individual workers and consumers.

Section 6 of H.R. 1773 would have similar or even more harmful effects on temporary agricultural workers. This bill requires guest workers to split arbitration costs and that the worker is responsible for his own attorney fees, regardless of whether the employer committed illegal acts that harmed the worker. Arbitrators are typically paid hundreds of dollars by the hour. The average American worker can hardly afford the costs of private arbitration; an average low-wage earning agricultural worker is even less likely to do so. Consequently, this provision would effectively grant employers the freedom to operate outside the law, mistreating workers and flouting worker protections without fear of accountability.

In 2008, Congress passed the Food, Conservation, and Energy Act of 2008 (“the farm bill”), which included provisions to ensure that poultry companies could not force poultry producers or growers into arbitration over contract disputes, but rather that arbitration would be voluntary on the part of both parties. Temporary agricultural workers should have the same legal protection.

Other Organizations

American Association for Justice | Center for Justice & Democracy at New York Law School Citizen Works | Consumer Action | Consumers for Auto Reliability and Safety | Homeowners Against Deficient Dwellings | National Association of Consumer Advocates | National Consumers League | National Employment Lawyers Association (NELA) | National Employment Law Project (NELP) | Public Citizen

More Information

For more information, please visit Fair Arbitration Now's website.

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Forced arbitration clauses cruel and unjust for workers   (FAN_ltr_HR_1773.pdf)