Bill to Nullify Mandatory Predispute Arbitration Agreements Passes in U.S. House


The U.S. House of Representatives has passed the “Forced Arbitration Injustice Repeal Act” (FAIR Act), which aims to nullify mandatory, predispute arbitration agreements and class-action waivers for employment, consumer protection, antitrust, and civil rights matters.

The FAIR Act, H.R. 1423, passed 225-186 in the House on September 20, 2019, largely along party lines. The bill now goes to the U.S. Senate, where its passage is far from certain. 

The FAIR Act purports to protect employees’ and consumers’ rights to pursue claims in court by:

To accomplish this, the FAIR Act amends the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1-14, by adding a Chapter 4 and:

If enacted as currently drafted, the FAIR Act will become effective as of the date enacted “and shall apply with respect to any dispute or claim that arises or accrues on or after such date.”

Introduced by U.S. Representative Hank Johnson (D-Ga.) in February 2019, and co-sponsored by more than 220 House Democrats, the FAIR Act’s purposes include addressing concerns that sexual harassment claims are swept under the carpet by employers’ use of arbitration and confidentiality agreements, consumer rights advocates’ criticism of the widespread inclusion of arbitration provisions in consumer agreements and financial services contracts that prevent individuals from suing companies in court, and critics of the U.S. Supreme Court’s Epic Systems Corp. v. Lewis, which upheld the enforceability of predispute arbitration agreements and class action waivers in employment agreements.

Opponents of the FAIR Act maintain that it is an overly broad and hastily written bill. They said it will undermine individual and institutional rights to enter into private contracts of their choosing, increase the cost of doing business and settling disputes, lead to unnecessary litigation and burden an already taxed judicial system, and carelessly upend decades of established FAA jurisprudence.

The FAIR Act has a long way to go before it becomes law and is likely to encounter opposition in the Senate. Indeed, in February 2019, Senator Richard Blumenthal (D-Conn.) introduced a companion bill to the FAIR Act in the Senate, S.610, and that bill has already met with some resistance and may not garner enough votes to pass. Moreover, on September 17, the White House issued a Statement of Administration Policy that suggested the President will veto the FAIR Act if it reaches his desk.


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National Law Review, Volume IX, Number 276