Two weeks ago, the Consumer Financial Protection Bureau unveiled a new rule that would prohibit lenders from including forced arbitration clauses with class action bans in their lending contracts. Today, Public Justice’s Executive Director, Paul Bland, will testify in front of the House’s Financial Institutions and Consumer Credit Subcommittee in support of this rule.
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.