This bill has passionate support and serious opposition. Does it stand a chance of becoming law?
On September 20, the U.S. House of Representatives passed the Forced Arbitration Injustice Repeal (FAIR) Act, which would eliminate the forced arbitration clauses in employment, consumer, and civil rights cases. It would enable consumers and workers to agree to arbitration after a dispute occurs. Rep. Hank Johnson (D-GA), who first introduced the bill, said, “The FAIR Act would level the playing field for Americans.”
In short, the FAIR Act is designed to:
- Require that agreements to arbitrate employment, consumer, civil rights, and antitrust disputes be made after a dispute arises.
- Provide court system access to men and women who are sexually harassed at work and reserve servicemembers who are fired for being deployed.
- Give consumers a choice of arbitration, thus creating a market where arbitrators must compete for their business.
Expressing support for the bill, Jerrold Nadler (D-NY) said, “Forced arbitration is a secret, closed system that deprives Americans of their day in court and shields corporations from accountability and scrutiny for abusive conduct.”
In a statement opposing the bill, Rep. Tom McClintock (R-CA) said, “The net result of this bill will be higher prices for products and lower wages for workers as companies factor the high cost of litigation into their business models.” Employer groups such as the Society for Human Resource Management (SHRM) also oppose the bill. In a letter to House members, SHRM president Johnny C. Taylor, Jr., said, “SHRM believes employers must have the ability to enact policies and procedures that best meet the needs of their individual organizations.”
The bill’s opponents cite a recent study that found employee-plaintiffs in arbitration won three times more often than in litigation (32% versus 11%) and that they won twice as much money (average $520,000 versus $270,000). At the same time, a national survey suggested that there is some bipartisan support for improving arbitration (38% of Republicans, 22% of Independents, and 40% of Democrats).
While the FAIR Act passed the House with a 225 to 186 vote, it is highly unlikely to gain any traction in the Senate, even if it is allowed to come up for a vote there.
