HFA supports arbitration to resolve disputes

Image of Legal books and gavel

The Home Furnishings Association has asked leaders of a key U.S. Senate committee to protect employers’ ability to settle disputes with customers and workers through impartial arbitration.

The Forced Arbitration Injustice Repeal Act passed the House of Representatives in a divided vote in September and now sits in the Senate Judiciary Committee. It would severely restrict the ability of businesses, including furniture retailers, to resolve disagreements through binding arbitration.

“Without this process, more lawsuits are likely to result, leading to expensive and time-consuming litigation without producing better outcomes,” HFA CEO Sharron Bradley wrote to Judiciary Committee Chairman Lindsey Graham (R-S.C.) and Ranking Member Dianne Feinstein (D-Calif.). The letter was directed by the HFA’s Government Relations Action Team.

Bradley cited an extensive study by the Institute for Legal Reform, released in May, which found that plaintiffs achieve a higher success rate through arbitration than they do via adjudication when cases are decided in court.

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Most furniture retailers may not use arbitration, but it can be a valuable tool, Bradley wrote to the senators.

Retailers want to satisfy customers, employees

“Our members don’t seek to tilt the playing field in one direction or the other,” she wrote. “Instead, they want to settle disputes to the mutual satisfaction of all parties. In any retail setting, businesses depend on customers who make repeated purchases, and they are successful when they build and maintain positive relationships with loyal, effective employees.

“When disputes arise,” Bradley continued, “the best outcomes for customers, employees and employers typically are achieved outside of court. Blocking the use of arbitration, where an objective arbiter considers all sides fairly and seeks to arrive at agreeable resolutions, might benefit trial lawyers but usually no one else.”

Meanwhile, the U.S. Chamber of Commerce and several other business groups filed suit against the state of California seeking to bar AB 51 from taking effect. The law, signed by Gov. Gavin Newsom in October, similarly would restrict the use of arbitration. The Chamber and other groups contend it’s invalid because it would conflict with federal law.

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“The new law could have significant impacts on California employers across all industries – if it ever goes into effect,” the Fisher Phillips law firm wrote in October. “There are significant questions around whether the new statute is invalid. We could see it scaled back or completely tossed out before ever being enforced based on an argument that it is pre-empted by federal law. Legal challenges are inevitable and will likely require years of litigation before a final resolution.”

Doug Clark

Doug is content manager and government relations staff member for the Home Furnishings Association. Please contact HFA with story ideas through our contact page.

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