The U.S. House of Representatives on last Thursday approved a bill that would prohibit companies from enforcing increasingly common agreements that require workers and consumers to bypass court and bring legal disputes in private arbitration.
The Democrat-led House voted 222-209 to pass the Forced Arbitration Injustice Repeal (FAIR) Act over the objections of Republicans and business groups who say it will deprive workers, consumers and companies of a faster and cheaper alternative to court.The House had passed the bill, which was first introduced in the wake of the #MeToo movement, in 2019 but it stalled in the Senate, which at the time was led by Republicans. President Joe Biden signed a bill into law earlier this month that prohibits mandatory arbitration of sexual harassment claims. That bill had widespread bipartisan support in Congress, but the broader FAIR Act has no Republican sponsors and a companion bill has not gained traction in the evenly divided Senate.
The bill would apply to any type of workplace or consumer dispute, nullifying arbitration provisions that are routinely included in employment contracts and terms-of-use agreements.
Rep. Jerry Nadler, a New York Democrat and the chair of the House Judiciary Committee, said during debate on the bill on Thursday that the FAIR Act extends the same basic fairness to workers and consumers as the sexual harassment legislation, and there was no reason for Republicans to opposed it.
But Rep. Dan Bishop, a Republican from North Carolina, said on Thursday that arbitration has been a fixture of the U.S. legal system for nearly a century, and restricting it would overburden state and federal courts.
“This bill will take the option to arbitrate off the table for everybody and put more money in the pockets of … plaintiffs’ class action trial lawyers,” Bishop said.
Critics of mandatory arbitration say it frequently favors employers and prevents many workers from bringing claims for unpaid wages, sexual harassment and other legal violations. More than 60 million private-sector, nonunion workers are subject to mandatory arbitration agreements, a number that has grown steadily in recent years, according to the left-leaning Economic Policy InstituteDownload Bulletin PDF