August 06, 2021
House Judiciary Committee Chairman Jerrold Nadler (D-NY) reintroduced the Restoring Justice for Workers Act, which would prohibit the use of mandatory predispute arbitration agreements between employers and employees.
The bill would prohibit employers from requiring employees to resolve work disputes through arbitration, as well as retaliation against workers for refusing to arbitrate work disputes. Further, the bill would prohibit postdispute arbitration agreements unless such agreements are not mandatory, made a condition of employment, or similarly obtained through coercion of the employee.
Nadler was joined by House Education and Labor Committee Chairman Bobby Scott (D-VA) and over two dozen other House Democrats in introducing the bill. “For far too long, corporations have used mandatory arbitration clauses—which are often buried in the fine print of employment contracts—to tie the hands of American workers and strip them of their right to take employers to court when their rights are violated,” said Rep. Nadler. “Victims of wage theft, discrimination, harassment, and other forms of corporate abuse and misconduct deserve their day in court.”
HR Policy has previously supported the use of predispute arbitration as a meaningful, cost-effective, and speedy alternative to pursuing litigation in an overburdened court system. HR Policy Senior Labor and Employment Counsel Roger King testified before Congress earlier this year to emphasize the advantages of alternative dispute resolution processes. In May, the Association sent a letter to Congress urging lawmakers to oppose the FAIR Act (H.R. 963), a bill introduced earlier this year that would similarly ban mandatory pre-dispute arbitration agreements in employment and consumer contracts, among other contexts.
Outlook: The Nadler bill is the third introduced this Congress that targets mandatory arbitration agreements—the FAIR Act and a bipartisan bill that would prohibit such agreements for sexual harassment or assault claims only were both introduced earlier this year. It remains to be seen which of the three bills will progress towards a full House floor vote. Any of the three bills would likely pass the Democrat-held House (the FAIR Act previously passed the House in 2019), but would have uncertain prospects in the more closely-divided Senate.