Bill to Ban Employment Arbitration Reintroduced

May 20, 2011

In response to the U.S. Supreme Court's recent decision upholding mandatory predispute arbitration agreements that prohibit the possibility for class action arbitrations, members of the House and Senate reintroduced the Arbitration Fairness Act (AFA) to overturn the decision and legislate a broad ban on such agreements.  The legislation (S. 987, H.R. 1873) would invalidate and prohibit mandatory predispute arbitration agreements in employment, civil rights, and consumer cases.  The bill would only permit arbitration that is agreed to after the dispute arises, unless the arbitration provision is in a collective bargaining agreement.  Senator Al Franken (D-MN) said, "Workers and consumers should never be forced to give up their rights to get hired for a job, or to get a cell phone.  I've introduced the Arbitration Fairness Act to ensure that workers and consumers have the right to choose arbitration over litigation, instead of being forced into it by corporations."  Earlier versions of the AFA would have barred mandatory predispute agreements between franchisees and franchisors but the new bill is silent on such agreements.  There is no congressional action currently scheduled on the AFA, and it is considered highly unlikely the measure will see action by the Republican House of Representatives.