Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform at the U.S. Chamber of Commerce, during an event held at the Chamber titled “CFPB's Anti-Arbitration Rule: Analysis & Implications,” on July 19, 2017. Photo: Diego M. Radzinschi/ALM

Corporations and their general counsel can brace for a flood of class action lawsuits if Congress passes legislation introduced Thursday aimed at eliminating forced arbitration, according to Lisa Rickard, president of the U.S. Chamber Institute for Legal Reform.

Rickard issued a statement Thursday after two Democratic members of Congress introduced measures in the House and Senate to end forced arbitration clauses in company contracts and employee handbooks. The legislation is called the Forced Arbitration Injustice Repeal Act or the FAIR Act; Rickard called it a “forced litigation” act.

A spokesperson at JAMS, an alternative dispute resolution center, told Corporate Counsel, “JAMS doesn't take positions on legislative or public policy as we are a neutral organization.” Eric Tuchmann, general counsel of the American Arbitration Association, was not available for comment.

Requiring arbitration in corporate contracts has been heavily criticized after it was revealed that 21st Century Fox Inc. used them to help keep secret cases of sexual misconduct brought against executives and that Wells Fargo & Co. used them to try to hide customer and employee complaints about its fake bank accounts.

The outcry grew so loud that last fall Google Inc. and Facebook Inc. ended forced arbitration for sexual harassment claims. And Google announced last week that it would end forced arbitration on all workplace claims by March 21.

The American Association for Justice, a pro-plaintiff organization, released polling numbers Thursday that found broad bipartisan support of 84 percent of the voters in favor of legislation to end forced arbitration.

Linda Lipsen, CEO of the association, said in a statement, “Forced arbitration clauses buried in the fine print hurt everyone. If corporations know they won't ever be held publicly responsible, our civil rights, as well as our public health and safety are at risk, from the cars we drive, to the jobs we take, and the food we eat.”

Paul Bland, executive director of Public Justice, agreed. Bland issued a statement in support of the legislation, saying, “The energy in favor of the FAIR Act is like nothing I've seen before in this fight for corporate accountability and against perpetrators of gender and race discrimination. Its passage would make American life much safer, healthier, and fairer.”

Earthjustice, an environmental law group, also announced its support for the legislation. Patrice Simms, vice president of litigation and head of the Access to Justice program at Earthjustice, said in a statement, “Forced arbitration clauses literally pick consumers' pockets by putting big business's favored arbitrators in charge, leaving regular people with no choice but to accept secretive, one-sided proceedings for their claims.

But the Chamber's Rickard strongly disagreed. She countered, “While proponents of this legislation make eliminating arbitration sound good, in reality, it is simply a forced litigation scheme that will cut most people off from justice.”

She argued that for many Americans, arbitration is a better path to justice because it is simpler, fairer, cheaper and faster than going to court. “Most arbitration cases can be done without the services of a trial lawyer, which is the problem for the plaintiffs' bar,” Rickard said.

Her statement concluded, “The package of proposals introduced [Thursday] would eliminate the ability of the vast majority of employees and consumers to solve most disputes, while creating class action lawsuits that primarily benefit plaintiffs' lawyers.”