A bill that would significantly restrict the ability for employers to arbitrate employment disputes was reintroduced in the House and Senate last week. The Arbitration Fairness Act of 2013 (H.R. 1844, S. 878) – introduced by Rep. Henry “Hank” Johnson (D-GA) and Sen. Al Franken (D-MN) – would amend the Federal Arbitration Act (FAA) to invalidate all predispute arbitration agreements that require the arbitration of any employment, antitrust, or consumer dispute, or conflict arising under any statute intended to protect civil rights. This Act would not apply to arbitration provisions contained in collective bargaining agreements.
This legislation broadly defines “employment dispute” as “a dispute between an employer and employee arising out of the relationship of employer and employee as defined by the Fair Labor Standards Act.” The definition of “consumer dispute” is similarly broad enough to encompass a wide range of legal conflicts. If enacted, this bill would essentially eliminate arbitration as a litigation alternative for employee claims – as well as those brought by clients/customers – unless the parties agree to the arbitral forum post-dispute. The provisions of this bill would take effect on the date of enactment, and would apply to any dispute or claim arising on or after that date.
As discussed in a press release, the impetus for the Arbitration Fairness Act is a series of Supreme Court cases sanctioning the use of arbitration agreements in a variety of circumstances.