Richard Messina signed a contract to work for two years as Vice President of Sales for North Central Distributing, a company that sells home décor and furniture under the name Yosemite Home Decor. When Yosemite fired him after six months, Mr. Messina filed a lawsuit for wrongful termination in Minnesota state court. But when the district court in Minnesota denied its transfer motion—voila! New rule! Yosemite announced for the first time that Mr. Messina had also signed an arbitration agreement and that the case actually could not continue in court at all and had to be decided by a private arbitrator instead.
After years of discussions and debates, the Consumer Financial Protection Bureau (CFPB) is unveiling a major new rule that will prohibit lenders from including forced arbitration clauses with class action bans in their lending contracts.