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This is not the U.S. Chamber of Commerce’s first attempt at taking down the FAIR Act or similar legislation that would curb arbitration.
Conservative pro-business groups have hit upon a new tactic to protect its members’ interests: outright purchasing of grassroots support.
Late last week, David Chami, an Arizona attorney who specializes in consumer protection, received an email from Drew Johnson, who identified himself as working with the U.S. Chamber of Commerce. Johnson offered Chami $2,000 if he could get one of his clients to sign their name to an op-ed opposing the Forced Arbitration Injustice Repeal (FAIR) Act, a bill in Congress.
The FAIR Act would eliminate forced arbitration for a number of sectors, allowing consumers and workers to file class-action lawsuits when companies violate the law. Sen. Kyrsten Sinema (D-AZ) is one of the few Democratic senators who has not expressed her support for the FAIR Act. So finding an Arizona resident to sing the praises of their experience in arbitration would be critical to the opposition’s efforts.
“My hope is to find a normal, everyday person who has benefitted from arbitration to sign on to the op-ed pasted below as the author,” Johnson wrote, presuming that because Chami had worked on a number of business arbitration cases, that he would be sympathetic to an effort to keep the arbitration system alive. “If one of your clients is willing to sign on to the piece, I can offer you $2,000 for your time.”
In other words, Johnson offered the attorney a bribe.
The pro-arbitration op-ed was already written and included in the body of the email. The op-ed calls arbitration “a relatively cheap and fast process” in a “much more relaxed” environment than a courtroom, which “could soon be eliminated if plaintiffs’ lawyers have their way.” The last line makes its objective clear: “Arizona’s workers and consumers can’t afford for Senators Sinema and [Mark] Kelly to allow [the FAIR Act] to happen.”
According to Paul Bland, the executive director of Public Justice, a legal advocacy nonprofit, workers and consumers can’t afford for the FAIR Act to not pass.
When an employee or consumer signs a contract, at the time of the job application or before signing up for a service, an arbitration clause is ubiquitously tucked into the small type of the text. This prevents those workers or consumers from filing a class-action lawsuit—if they’re sexually harassed, if their service stops working, or if their investor flees to the Cayman Islands with their investments.
Corporate lobbyists continue to find new innovations to ensure that access to justice for wronged consumers and employees remains closed.
The FAIR Act would get rid of a slew of forced arbitration clauses, including ones that apply to workers, nursing home patients, investors, and consumers. When cases go through arbitration—privately, behind closed doors, instead of in court—the company almost always comes out on top.
Although this email is the only one the Prospect has so far obtained, experts have suggested that it’s likely this is a national campaign to rally support against the FAIR Act in states with senators on the edge. Bland, who has worked with arbitration for over two decades, has never seen this sort of tactic before.
Chami, the Arizona attorney, says he had never been offered money before to help organizations fight the FAIR Act. He considered the offer a “disgusting act” and the $2,000 amount laughable. He knows that his clients would listen to him if he asked them to sign their name to an op-ed, without fully understanding arbitration or what they were supporting.
Arbitration keeps the public in the dark. “It means that we don’t actually know how often corporations are breaking the law, or how often they’re cheating consumers, because the statistics and the data are confidential,” said Chami in a phone call. “To me, this email is an indication of how desperate they are.”
When asked about the op-ed solicitation, Johnson denied having anything to do with the U.S. Chamber of Commerce, despite writing that he was “working on an effort with” the Chamber and a coalition of think tanks in his email to the Arizona attorney. In an email to me, he described the miscommunication as “poor wording.”
Instead, he says the solicitation was on behalf of his wife, who runs an unnamed communications firm. Her website doesn’t reveal any more information. As a “Travel and Adventure” blog, the word “arbitration” is entirely absent from her website. However, she does describe herself as “a freelance digital marketer, graphic designer, and editor for policy organizations dedicated to promoting the free market.”
Johnson identifies himself as a “columnist and scholar” in the email. He’s officially employed by the National Center for Public Policy Research, a long-time conservative think tank, where he works as a senior fellow. On Twitter, his bio indicates he’s a contributor for Newsmax.
Over email, Johnson did not say whether he sent the same solicitation to other attorneys, and insisted that it was his “wife’s project” despite the fact that neither she nor her alleged firm were ever mentioned with the original $2,000 offer.
This is not the U.S. Chamber of Commerce’s first attempt at taking down the FAIR Act or similar legislation that would curb arbitration. The organization’s website indicates pro-arbitration work dating back to 2014, with several letters to Congress opposing various forms of legislation in recent years. The U.S. Chamber of Commerce, despite its anodyne name, is a conservative nonprofit with hefty financial backing. According to its tax returns, its annual revenue in 2019 amounted to $173 million.
Forced arbitration has ballooned in the last three decades. According to Bland, in January 1999, only two of the ten largest credit card companies had forced arbitration clauses. Less than one year later, nine of them did. Arbitration clauses are in 95 percent of nursing home facility contracts, protecting firms from public lawsuits that would likely damage their reputation and lead to a larger payout for wronged residents and their families. The Employee Rights Advocacy Institute reports that 80 of the Fortune 100 companies include an arbitration clause in their employment contracts. And 52 include arbitration as a condition of employment, leaving applicants no choice but to sign their judicial rights away to private handling.
Arbitration is coordinated through third-party businesses devoted to providing arbitrators to settle the disputes privately. These arbitrators are often former corporate defense attorneys. There is a significant incentive for these arbitration firms to side with the corporations, as they have a higher chance of being hired again in the event of another arbitration case.
The arbitration business is booming: the American Arbitration Association raked in $117 million 2019, according to its tax filings. And according to Bland, the arbitrators receive very high fees for their work, typically averaging around $500 to $600 an hour.
Republican and Democratic voters alike overwhelmingly support ending forced arbitration. According to a survey conducted by Hart Research, a public opinion research group, 83 percent of Democrats and 87 percent of Republicans support eliminating forced arbitration. Yet even though an overwhelming majority of Republican voters want to end arbitration, their representatives in Congress still side with corporations. Although there are 39 co-sponsors, no Senate Republicans have sponsored the bill, making passage unlikely without changes to the filibuster rule. Nevertheless, corporate lobbyists continue to find new innovations to ensure that access to justice for wronged consumers and employees remains closed.
“The arbitration system is overwhelmingly rigged against individual human beings in favor of corporations,” said Bland. “Nearly every Republican has said they’re on the side of the big corporate donors, and what they’re counting on is that their voters will never learn about it.”
