Is Mandatory Arbitration Circling the Drain?

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Patricia Tsipras

March 21, 2022

On March 17, 2022, the U.S. House of Representatives passed a bill – entitled The Forced Arbitration Injustice Repeal (FAIR) Act (H.R. 963) – that would prohibit employers from enforcing agreements to arbitrate that employees sign before a dispute arises.  Only one Republican voted in favor of the bill in the House.  The bill is expected to face resistance in the Senate.

Proponents of the bill argue that it merely extends to all workers the same basic fairness of the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which President Biden signed into law on March 3.  Parties would be able to agree to arbitrate their dispute after it arises.

Opponents of the bill raised concerns that its broad prohibitions would burden the judicial system and prevent parties from freely entering into contracts.  They note that parties often get relief more quickly and less expensively through arbitration.

If enacted, the FAIR Act would invalidate pre-dispute arbitration agreements and class action waivers for employment and civil rights disputes.  It would take effect immediately and would apply to disputes or claims that arise or accrue on or after that date.

 
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