Major strides have been made this summer toward banning forced arbitration clauses which strip consumers of their constitutional right to have their disputes heard and decided by a jury of their peers. Unknowingly, consumers and employees are often subjected to forced arbitration provisions when they sign credit card and cell phone contracts, when they purchase retail products, when they are admitted to nursing home facilities, and when they enter into employment contracts.

President Obama recently signed The Fair Pay and Safe Workplaces Executive Order which will prohibit companies pursuing government contracts from requiring their workers to agree upfront to mandatory arbitration, in which an intermediary hears both sides and then makes a binding decision. That provision, which applies to new contracts exceeding $1 million, will affect disputes brought under the anti-discrimination section of the Civil Rights Act or to accusations of sexual assault or harassment. The Department of Labor estimates that there are roughly 24,000 businesses with federal contracts, employing about 28 million workers.

In addition to this Executive Order, the AFL-CIO Executive Council recently issued a public statement opposing forced arbitration. The AFL-CIO stated that companies should not be permitted to force shareholders into any system that limits their rights or their ability to participate in a class action to recover losses. The AFL-CIO’s statement also urges the Securities and Exchange Commission to act to preserve the ability of workers to protect their retirement and pension funds through private litigation and to prevent corporations from exempting themselves from the civil justice system through forced arbitration and class action bans.

These actions by the White House and the AFL-CIO are welcomed first steps toward the eradication of forced arbitration clauses which deny consumers their constitutional rights and prevent corporations from being held accountable for their actions.

SUGARMAN has a team of dedicated personal injury attorneys who represent those who have been injured, including cases of nursing home negligence. If you have been hurt in an accident and wish to speak to one of our attorneys regarding liability, please fill out a Contact Form, call us at (617) 542-1000 or e-mail