In the wake of White Nationalist demonstrations in Charlottesville, American business leaders surprisingly and boldly stepped up to demonstrate moral leadership at a time when we needed it most.
That response, from the CEOs who spoke out against hatred, was a stunning and landmark moment in American history. I hope their actions are just the start of displaying moral guidance in other critically important fields, such as healthcare, immigration, and climate change.
One area where leadership is needed right now is access to justice and the American legal system.
Read the Fine Print
Over the last few years, large companies have used the fine print in their consumer and employment contracts to insulate themselves from liability for corporate wrongdoing and sexual harassment. These contractual provisions require consumers and employees to submit any claims one-by-one, individually, in private arbitration, instead of the public courts with a jury of peers.
Forced arbitration clauses are often coupled with gag orders that prevent people from speaking publicly about their allegations or the arbitration proceedings, or even sharing intelligence with other victims.
These fine-print clauses frequently prevent individuals from joining together with others in a class or collective action in order to pursue their claims as a large group. In certain situations, a class action may be the only feasible route to unmask rampant, systemic violations and to obtain relief for repeat sexual harassment or corporate wrongdoing.
For example, we can only assess the full scope of a sexual harassment problem by hearing the reports numerous women have made against Hollywood producer Harvey Weinstein or seeing the 250 or more declarations from male and female employees at the Kay Jewelers and Jared the Galleria of Jewelry retail chains.
Remember Wells Fargo?
If a bank like Wells Fargo imposes an unauthorized $100 charge on each of its customers, a single customer is unlikely to bring an individual lawsuit for just $100 – or even $1000 – and as a result, the public will never know if Wells Fargo was held accountable, or if that case was forced into secret arbitration.
However, through a class action lawsuit, injured consumers can proceed collectively and in public against Wells Fargo to enforce their rights as a group, when it would otherwise be impossible for an individual consumer to do so.
Over the past few years, Wells Fargo has opened up millions of unauthorized, bogus accounts to collect illegal fees from customers across the country, and Wells Fargo has used the small print in its contracts to shield itself from liability and delay public accountability.
Why the CFPB Rule Matters
A new rule by the Consumer Financial Protection Bureau (CFPB) would protect consumers by preventing companies from using the small print in their contracts to frustrate the ability of consumers to bring class actions in our courts – unless, that is, Congress steps in to repeal the rule.
Sadly, some sectors of corporate America are heavily lobbying Congress to repeal this rule, so they can frustrate the ability of consumers to access the courts, and silence their voices.
The CFPB’s arbitration rule keeps the courthouse door open, and creates a more level playing field for consumers to bring their claims. This rule would prevent companies from automatically blocking class actions so that companies engaged in widespread wrongdoing can face the music in a public court.
Will You Rise to the Challenge?
At a time when American institutions, including our courts, have been under assault, it is critically important for our democracy to maintain public access to our judiciary.
Preserving access to our courts is not often understood as a priority, but without access to courts, the rule of law and our rights are weakened. Every other right virtually disappears if citizens lose their ability to enforce their rights in court.
I hope there are leaders in corporate America who, as they did after Charlottesville, will rise to the challenge and show moral leadership by supporting the CFPB arbitration rule, so any companies who engage in widespread wrongdoing will no longer get an automatic free pass.