Senate approves Wieckowski arbitration bills to better protect workers, consumers

May 12, 2016

Sacramento – The California State Senate passed a pair of bills today to make the binding, private arbitration process fairer for California workers and consumers by ensuring that they have access to a court reporter and cannot be forced by a corporation to travel out of state to resolve a dispute. Both bills, authored by Senator Bob Wieckowski (D-Fremont) now head to the state Assembly. 

“The deck is stacked against employees and consumers who are increasingly forced to sign arbitration agreements that limit or deny their day in court, just to get a job, obtain a credit card, cell phone or other products and services,” said Wieckowski, a member of the Senate Judiciary Committee.  “SB 1241 targets two of the worst clauses that can appear in contracts to make sure that Californians who are forced to resolve disputes in private binding arbitration don’t face the additional burdens of having to travel out of state or have another state’s laws govern their dispute. If they work in California or by the goods and services in California, the dispute should be handled under California law.  The cost of travel alone will prevent many people from exercising their legal rights.”

When SB 1241 was heard last month in the Senate Judiciary Committee, Tara Zoumer testified how she was let go by her California employer after refusing to sign a binding arbitration agreement.  She filed a wrongful termination suit, but now is being forced to arbitrate her case in New York.

“California is justifiably proud to have among the strongest worker protections of any state,” said Mariko Yoshihara, policy director of the California Employment Lawyers Association.  “This bill will prevent out-of-state employers from trying to exempt themselves from the laws of this state by using oppressive contract terms that force California workers to accept the less protective laws of other states and to travel to other states to resolve employment disputes that arose in California.”

The Senate also passed SB 1007, Wieckowski’s bill affirming a person has the right to a certified court reporter in private arbitration.  Consumers often lack documentation to support claims of misconduct in arbitration because a court reporter was not present to create a record of the proceedings.

“This bill also makes sure that an indigent consumer or worker seeking a court reporter will have one provided at the expense of the other party,” Wieckowski said.  “By having a transcript of the arbitration employees and consumers will have a better chance of obtaining justice if there is misconduct or fraud in the arbitration process.”

The approval of the state bills come as the federal Consumer Financial Protection Bureau recently issued proposed new rules targeting arbitration agreements in the financial industry.  The new rules would prohibit financial companies from using arbitration agreements to prevent consumers from participating in class action suits. 

Arbitration agreements are often buried into the fine print of contracts and the CFPB found that 75 percent of consumers are unaware if the clauses apply to them.     

Senator Wieckowski represents the 10th District, which includes southern Alameda County and northeast Santa Clara County.