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How the Arbitration Fairness Act of 2009 Affects Predispute Arbitration Agreements

Tuesday, March, 22, 2011


The Arbitration Fairness Act of 2009 would have leveled the playing field in dispute resolutions between large corporations and private individuals. Large corporations are increasingly strong-arming employees and consumers to accept arbitration clauses as conditions of employment or services. Arbitration between parties of disparate economic power threatens the rights of individuals. Lawmakers sought to reinstate the rights to a court process that so many people have been forced to give up.

According to the bill, many individuals are forced to give up their right to a court process when they accept a job, receive medical services or even buy a car. If a dispute arises from any of these transactions, individual are forced into arbitration.

Companies can benefit from arbitration in several ways. First, arbitration is non-public, relieving companies of the worry of bad publicity, a powerful incentive to “do the right thing.” Arbitration is binding with no recourse for an appeal. To help ensure their win, some companies even write unfair provisions into their pre-dispute arbitration agreements.

The Arbitration Fairness Act of 2009 would have invalidated these predispute arbitration agreements. The members of Congress who introduced the bill recognized that arbitration, while a valuable resolution vehicle in some circumstances, may unfairly tip the favor to powerful corporations. Its passing would have been a victory of consumers and employees.

However, the Arbitration Fairness Act of 2009 did not pass. With this legislation dead, you best and most reliable means of a fair arbitration process is hire an arbitration attorney who will fight for you and knows how to win your arbitration case.