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By: Margot Parker
Following President Biden’s recent signing of a bill ending mandatory arbitration of sexual assault and harassment claims accruing on or after March 2, 2022, the U.S. House approved the FAIR Act (Forced Arbitration Injustice Repeal) on March 17, 2022 – a bill seeking to broadly prohibit companies from enforcing arbitration agreements with workers and consumers as to any type of workplace or consumer dispute. If passed, the FAIR Act would nullify arbitration provisions that are often included in employment contracts and consumer agreements.
Unlike the prohibition of mandatory arbitration of sexual harassment claims, the FAIR Act has not received bipartisan support. Opponents and employer advocates argue the bill is overreaching, as it would ban mandatory arbitration of any type of workplace or consumer claim, including disputes of a much less sensitive nature than those addressed by sexual harassment legislation, and would overburden state and federal courts.
Other bills against arbitration are also pending, including the Investor Choice Act, which would ban investment advisers and broker-dealers from mandating arbitration with consumers before FINRA (the Financial Industry Regulatory Agency), as well as the Fairness in Nursing Home Arbitration Act, applicable to elders in long-term care facilities. As with the FAIR Act, these single-issue bills lack bipartisan support and face strong opposition from corporate lobbyists. The FAIR Act will now be reviewed in the U.S. Senate, where it is anticipated to face challenges from employers due to its wide-reaching scope.
For additional information, please contact Margot Parker at [email protected] or your FMG attorney.