Does Colorado Need More Transparency In Forced Arbitration? There’s A Bill For That

January 15, 2020
Democratic Senate Majority Leader Steve Fenberg and Sen. Mike Foote stand alongside a Colorado family who described a difficult arbitration issue they lived through at a news conference at the capitol, Jan. 15, 2020. Democratic Rep. Dominque Jackson, far right, supports new legislative changes to arbitration in Colorado.Democratic Senate Majority Leader Steve Fenberg and Sen. Mike Foote stand alongside a Colorado family who described a difficult arbitration issue they lived through at a news conference at the capitol, Jan. 15, 2020. Democratic Rep. Dominque Jackson, far right, supports new legislative changes to arbitration in Colorado.Bente Birkeland/CPR News
Democratic Senate Majority Leader Steve Fenberg and Sen. Mike Foote stand alongside a Colorado family who described a difficult arbitration issue they lived through at a news conference at the capitol, Jan. 15, 2020. Democratic Rep. Dominque Jackson, far right, supports new legislative changes to arbitration in Colorado.

When it comes to arbitration, some Democratic lawmakers say the deck is currently stacked against regular people who have no choice but to go through it. A new effort is underway to put some guardrails around how disputes are settled through arbitration and limits the type of experience arbitrators can have. 

The language that pins a consumer into arbitration is “ubiquitous,” said Democratic Sen. Mike Foote of Lafayette. His family came across it when they were in the market for a new car.

“We finally decided on one that we wanted to get and we can afford to get,” he said. “And we actually went through the contract try to read about all the terms. And right, there was a forced arbitration clause that if something went wrong, of course they assured us nothing would ever go wrong.”

One of the key provisions in Senate Bill 20-093 would increase transparency on how specific disputes are resolved. A similar effort to reform the arbitration process failed two years ago when Republicans were in charge of the state senate. Fellow senator, and Colorado Springs Republican, Paul Lundeen has concerns about the bill’s conflict of interest requirements. They could exclude arbitrators with extensive work experience in a field similar to the issue that is under arbitration. 

“The reality is when you have arbitrators who have great experience in an industry they bring the most value to the arbitration,” he said. “To kick them out and say, ‘you can’t participate because you’ve actually worked in or near this industry,’ I think that’s a terrible mistake.”

Some Democrats would like to ban forced arbitration altogether, especially in cases where the dispute involves discrimination or sexual harassment. That’s not a possibility however, as federal law prevents the passage of any efforts to ban it altogether.