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Arbitration Fairness Act of 2009

On February 12, the Arbitration Fairness Act was introduced into the House Judiciary Committee. A similar bill was attempted in 2007 but never made it through. With the most recent election, however, the time has never been better for a much needed change to the Federal Arbitration Act.

Why is this important? The Act would prohibit binding arbitration agreements in any “employment, consumer, or franchise dispute”, and would set to right a laundry list of wrongs such arbitration agreements impose upon unwitting consumers. Arbitration is intended to be, and should be, a contractually agreed upon provision between two parties of equal bargaining strength. In the consumer context the parties are on anything but equal footing. Rather, the agreements are presented on a take-it-or-leave-it basis or, worse yet, are simply hidden in small type amid a sea of legalese that would make even a lawyer’s head hurt. Arbitration Agreements often impose overbearing terms, such as a ban on class action lawsuits or prohibitive costs, and have a limited number of arbitration companies to choose from (all of which, by the way, have a vested interest in keeping their repeat customers–businesses–happy). Especially in consumer vehicle sales, the dealerships will allow themselves to use the courts for self-help measures such as repossessions and collection actions, but the same agreement will keep the customer from using the courts at all.

If you are in North Carolina’s 13th Congressional District, drop a quick email to Representative Brad Miller, one of the many sponsors of this important bill, and voice your support. If you are not in the 13th District, please take a second and contact your local Representative to encourage him or her to vote in support of H.R. 1020.

In the meantime, I will keep you posted as to this Bill’s progress and inform you if and when it moves to the Senate.