Wieckowski arbitration bills aiding workers, consumers pass Assembly Judiciary Committee

California employees, consumers would not be forced to travel out of state in private, forced arbitration; could have a court reporter present

June 21, 2016

Sacramento – A bill by Senator Bob Wieckowski (D-Fremont) to protect Californians from two of the worst clauses in employment and consumer contracts passed the Assembly Judiciary Committee this afternoon.  The committee also approved another Wieckowski bill to ensure consumers have access to a court reporter in forced arbitration proceedings.

SB 1241 targets the choice of venue and choice of law clauses that can require a consumer to travel to another state and allow companies to intentionally pick what state’s law governs the arbitration.  This allows the companies to choose rules that disadvantage California consumers and workers.

“If you are selling goods or services in California or employing Californians, you should not be able to force dispute resolution to take place clear across the country, and under another state’s weaker law,” said Wieckowski, a member of the Senate’s Judiciary Committee.  “Forcing someone to pay out of pocket to fly to Florida has a chilling effect on their ability to receive justice.  It prevents consumers who cannot afford the travel, but who have been harmed by an illegal practice, from seeking compensation.  SB 1241 will prohibit companies from nickel and diming their victims in this way.”

Employees and consumers are increasingly forced to sign binding arbitration agreements that limit or deny their day in court or prohibit their ability to file class-action lawsuits, just to get a job, or receive common goods or services, such as a cell phone or credit card.  The agreements are often buried in pages of text.

Tara Zoumer told the committee about her experience where her California employer set up a conference room, brought employees in one at a time and placed a stack of papers in front of them to sign, including a binding arbitration agreement.  When she asked what would happen if she didn’t sign the agreement, Zoumer said she was told her continued employment was sufficient to constitute acceptance of the agreement.

Zoumer was fired and filed a wrongful termination suit against her employer in San Francisco Superior Court.  But she is now being forced to contest her case through arbitration in New York. 

“Before this experience, I never knew a company could take away your rights through forced arbitration,” Zoumer said.

The committee also approved Wieckowski’s SB 1007.  The bill affirms that people have the right to a certified court reporter in private arbitration.  Having an official record will enable a consumer to show documentation of misconduct or fraud in the arbitration process.   

The federal Consumer Financial Protection Bureau (CFPB) completed the largest study on arbitration in the United States and found that 88 percent of mobile wireless providers who authorize third parties to charge consumers for services include forced arbitration provisions.  The CFPB found similarly high percentages in other industries.

SB 1241 is supported by the California Employment Lawyers Association, the California Democratic Party, the California Dispute Resolution Council, the Consumer Federation, the Consumer Attorneys of California, and Small Business California.

SB 1007 is supported by the Conference of California Bar Association and Court Reporters Board of California.  

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