Durbin Questions Witnesses During Senate Judiciary Committee Hearing on the Effects of Forced Arbitration

WASHINGTON – U.S. Senate Majority Whip Dick Durbin (D-IL), Chair of the Senate Judiciary Committee, today questioned witnesses during a Senate Judiciary Committee hearing entitled “Small Print, Big Impact: Examining the Effects of Forced Arbitration.”  The hearing examined the use of forced arbitration clauses in employment contracts, consumer agreements, and other areas, as well as the injustices faced by workers, consumers, and others who are denied their days in court by forced arbitration clauses.

Durbin first questioned Ms. Joanne Grace, a nurse who faced age-based comments from her supervisor and was laid off and replaced by a younger, less experienced nurse after returning from COVID-related sick leave in 2021.  Ms. Grace has brought age discrimination claims against her former employer in district court, but they are currently trying to force her case into arbitration, alleging she agreed to arbitrate any future disputes by completing certain arbitration-related training.  Durbin asked about her experience with forced arbitration.

“On behalf of an institution filled with seasoned warriors, we stand shoulder to shoulder with you in this effort.  Thank you for telling your story for all the country to hear.  It's very important.  You never signed, checked a box, or in any way indicated you were part of any forced arbitration agreement?”  Durbin asked.

Ms. Grace responded that she never signed any forced arbitration agreement, and she would “never advocate for anybody to sign it.”

Durbin then asked Mr. Victor Schwartz, Co-chair, Public Policy Practice Group, Shook Hardy & Bacon, about whether arbitration is truly agreed to when accepting terms of service.  Specifically, Durbin cited the streaming company Roku who recently updated its “Dispute Resolution Terms.”  Despite not providing a description of what terms changed, the company would not allow users to access their Roku devices to stream shows unless users first agreed to the updated terms. 

“[The contract says], ‘any disputes between us [meaning the consumer and company], will be settled by binding arbitration.’  Meaning we both give up the right to go to court… let’s walk through what you would have to do to opt out of that provision in that contract.   You cannot opt out by email.  Instead, you have 30 days to mail a letter to Roku’s General Counsel.  The letter must include the name of each person opting out, their contact information, the specific Roku product models owned, the software in the product, the services at issue, the email address you used to set up your Roku account, and, if applicable, a copy of your purchase receipt.  Opt-out notices submitted in any other way, including email, are considered ineffective… Mr. Schartz, do you think this is a contract that should be honored?” Durbin asked.

Mr. Schartz responded by stating, “having federal regulation of these arbitration agreements I think is a sound step to do... Some of the agreements may be unfair… I'm suggesting consideration of having regulation at the federal level of these agreements, especially in areas of controversy like age, military, children, [and] nursing homes.”

Video of Durbin’s questions in Committee is available here.

Audio of Durbin’s questions in Committee is available here.

Footage of Durbin’s questions in Committee is available here for TV Stations.

An Economic Policy Institute study found that more than half of non-union, private-sector employees in the United States are subject to forced arbitration today, equating to roughly 60 million people. A study by the National Consumer Law Center found that more than 99 percent of consumers who use popular products and services were unaware that they are likewise subject to forced arbitration. Forced arbitration is often one-sided, granting the business the right to sue in court while denying that same right to the employee or consumer.

The hearing continues Chair Durbin and the Senate Judiciary Committee’s work to end the practice of forced arbitration and allow victims their day in court. In 2022, President Biden signed into law the bipartisan Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, sponsored in the Senate by Durbin and U.S. Senators Kirsten Gillibrand (D-NY) and Lindsey Graham (R-SC). 

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