US House passes bill to end mandatory arbitration in workplace disputes
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US House passes bill to end mandatory arbitration in workplace disputes

The US House of Representatives passed a bill Thursday that would prevent companies from enforcing agreements with employees and consumers requiring legal disputes to be settled in private arbitration, rather than in the courts.

The bill passed in the House on a 222-209 vote, with all 221 Democrats voting in favor and all but one Republican voting against it.

Representative Hank Johnson, the bill’s sponsor, stated:

My bill will restore fairness to the American justice system by reasserting an individual’s right to access the court system. 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.

In addition to the 209 Republicans who voted against the bill, the FAIR Act was criticized by the by business groups who argued that the arbitration system was the best, fastest and cheapest way to resolve legal disputes.

In a statement on its website, the US Chamber of Commerce said:

The FAIR Act would effectively eliminate the use and availability of pre-dispute arbitration agreements as a means to fairly resolve antitrust, employment, civil rights, and consumer disputes. The ultimate goal of this bill is to promote expensive class action litigation that does little to help businesses, consumers and employees and serves principally to benefit the attorneys who file class action lawsuits.

According to a report by Reuters, a similar bill was passed in the House in 2019 in the wake of the #MeToo movement but stalled in the Republican-controlled Senate. Last month, Congress passed the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, a more narrow version of the FAIR Act that banned using mandatory arbitration of sexual harassment claims. That bill enjoyed more bipartisan support, passing the House 335-97 and the Senate by a voice vote. On March 3, President Joe Biden signed that bill into law.

Democrats argue that the freedom from arbitration provided by that law should be shared by all workers and consumers. Republicans, meanwhile, point to the longstanding reliance on arbitration (the Federal Arbitration Act was passed in 1925) and said eliminating mandatory arbitration would jam up the nation’s court system. According to a report by the Economic Policy Institute from 2018, more than 60 million workers are barred from access to the courts.

The FAIR Act will now go to the Senate, where companion legislation has been introduced by Sen. Ricard Blumenthal and has 39 co-sponsors.