The Iowa Senator this week reintroduced his legislation to limit mandatory arbitration agreements. The Grassley provision was adopted by the Senate as part of the 2002 farm bill, but it was not included in the final version of the farm bill.
"Many packers have included arbitration clauses in their contracts with farmers. These clauses significantly reduce the small family farmer's ability to get a fair shot when a dispute with packers arises," Grassley said.
The provision amends the Federal Arbitration Act to prohibit mandatory arbitration clauses from being included in contracts between livestock producers and packers. Grassley said the amendment would allow farmers the opportunity to choose the best form of settlement when a dispute arises.
"Arbitration must be an option, but it should be no more than an option," Grassley said.
When farmers choose arbitration, they waive their rights to access the courts and a constitutional right to a jury trial. Certain standardized court rules are also waived, such as the right to discovery
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The bill will be referred to the Senate Judiciary Committee for further consideration. Grassley is a senior member of the committee.