Legislation Banning Pre-Dispute Arbitration Agreements Reintroduced

May 31, 2013

On the premise that "mandatory arbitration undermines the development of public law because there is inadequate transparency and inadequate judicial review," legislation has been reintroduced to impose a broad ban on pre-dispute arbitration agreements involving employment and consumer disputes.  The Arbitration Fairness Act (S. 878/H.R. 1844), introduced by Sen. Al Franken (D-MN) and Rep. Hank Johnson (D-GA), would only permit arbitration that is agreed to after the dispute arises, unless the arbitration provision is in a collective bargaining agreement.  The bill's preamble states: “Mandatory arbitration can be a huge disadvantage to consumers, workers, and small businesses, often limiting their ability to have any meaningful legal recourse when they are wronged.”  In a statement, Franken said, “I've reintroduced the Arbitration Fairness Act to ensure that people and small businesses maintain their right to their day in court when they are cheated.”  There is no congressional action currently scheduled on the bill, and it is considered highly unlikely the measure will see action by the Republican House of Representatives.