Tag: bill H.R. 963

House of Representatives Passes Legislation Banning Employment Arbitration Agreements The U.S. House of Representatives has passed a bill that would prevent employers from enforcing agreements to settle disputes in private arbitration, which are signed before the dispute arises. This bill passed the House despite facing overwhelming opposition by Republicans; however; as a result, it may face difficulty in the Senate. The bill H.R. 963 dubbed the Forced Arbitration Injustice Repeal (FAIR) Act would create a broad ban on agreements between employers and employees to settle future disputes before an arbitrator in lieu of a court. The bill's reach is far more extensive than the employment context alone and would apply in all consumer, antitrust, and civil rights disputes as well and prohibit all agreements and practices that would prevent individuals from participating in class and collective actions relating to the same. The House's passage of the bill comes close in the wake of a new law prohibiting mandatory arbitration agreements for claims of sexual harassment or assault. Representative Jerry Nadler argued that the bill would simply extend the same fairness to all other workers and consumers. However, this bill is far more extensive than this other legislation and will prohibit arbitration agreements and class-action waivers in everything from employment to credit card agreements. The sponsor of the bill Representative Hank Johnson indicated that this broad extent is intentional. According to the Congressman, "The FAIR Act would ensure that men and women contracting with more powerful entities aren't forced into private arbitration, where the bigger party often has the advantage of choosing the arbitrator in an unappealable decision." However, Republicans and the business community as a whole have voiced many concerns about the legislation. These include that the legislation will significantly restrict the ability for parties to enter contracts as they choose and that by so extensively removing the option to arbitrate disputes, the court system would be heavily burdened. Notably, for employers, should the bill become law, it would take effect immediately, but it would only apply to arbitration agreements entered into upon or after that date. This means that existing arbitration agreements would remain valid and enforceable. Learn More The bill also will not apply to collective bargaining agreements which include arbitration provisions. Finally, the bill also does not prohibit agreements to arbitrate made after a dispute arises. This would allow an employee to choose the greater privacy afforded by arbitration. Though the Forced Arbitration Injustice Repeal ("FAIR") Act of 2022 has made it through the House of Representatives, it will likely face a difficult time making it through the Senate. Employers will, however, want to keep an eye on this potentially quite significant piece of legislation. Pre-employ offers resources to help employers stay compliant and incorporate fair chance hiring practices. Download our free resource guide on 5 Tips To Avoid FCRA Non-Compliance to learn more. Sources

Tag: bill H.R. 963

House of Representatives Passes Legislation Banning Employment Arbitration Agreements

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