The current legislation, HR 534, deals specifically with prohibiting mandatory arbitration provisions in contracts between auto dealers and auto makers. The problems with mandatory arbitration that prompted this legislation, however, are not unique to auto dealers.
Arbitration is a legal process to resolve disputes between parties without using the court system.
Provisions for arbitration are usually contained in a contract between two parties. Those contract provisions set out the rules for the arbitration, including what parts of the contract will be subject to arbitration, how an arbitrator will be chosen, which of the parties will pay for the arbitration services, and where the arbitration proceeding will take place. At the time that made sense - corporations would be on roughly equal footing, having the business and legal expertise to knowingly enter into an agreement that waived the right to take disputes over contracts to court. Well, over the past 75 years arbitration provisions have steadily proliferated into all contracts to the point now where you would be hard pressed to find a single consumer, whether they know it or not, who is not subject to a mandatory arbitration clause in a consumer contract. If you have ever purchased or rented an appliance, a car, a house, a computer, computer software or even the radio you're listening to, you probably have unknowingly waived your right to take to court a dispute about that product and agreed to mandatory binding arbitration.