Democrats introduced two bills on Monday that would give consumers and workers a leg up in arbitration proceedings — a process where businesses settle disputes privately outside of court — by making prior complaints public and preventing conflicts of interest.
Arbitration is used to reach fast and flexible agreements between workers and employers and consumers and companies. But often these agreements are not optional, curtailing employees’ rights to seek remedy through the legal system.
Deb Price, of Aurora, said she was required to sign an arbitration agreement while working as a cashier at the supermarket Sprouts in 2011. She says she didn’t know much about the agreement until after she left her job and later received a letter in 2016 that said the company inadvertently gave out her address, social security number and tax information. Now, she says, there isn’t much she can do.
“I signed an arbitration agreement which takes my rights away to pursue any kind of action towards them,” Price said at a press conference at the state Capitol on Monday.
Arbitration is on the rise in the U.S. In the 1990s, about 2 percent of non-unionized workers signed agreements; today, they cover over half of these workers, according to a report by a Washington, D.C.-based research group. And the issue has gained more attention in the wake of the #MeToo movement. In cases of sexual harassment, this confidential process can shield repeat offenders, creating a culture of secrecy, as a recent letter to Congress signed by Colorado Attorney General Cynthia Coffman states.
Rep. Dominique Jackson, D-Aurora, said this secrecy can also hide a company’s history of bad behavior. Currently, arbitration proceedings are not part of the public record.
That’s why Jackson and Rep. Dylan Roberts, D-Steamboat Springs, are sponsoring a bill that would require arbitration service providers to make public some information about these proceedings. This includes the business involved, the nature of the dispute, which party prevailed and the award amount.
Rep. Mike Weissman, D-Aurora, is sponsoring another bill that requires arbitrators to disclose any family, financial, social, political or other relationships that may create a bias. This bias can disqualify the arbitrator from the case.
The 1925 Federal Arbitration Act preempts states from prohibiting arbitration.
