Legislation to Prohibit Arbitration Clauses from Denying Employees Their Day in Court

March 4th, 2021

US-Senate-BuildingForced arbitration is a powerful tool used by employers to limit employees from suing them in court. Under the Federal Arbitration Act (“FAA”), employers have wide latitude to force employees into mandatory arbitration. Arbitration is a binding process that is conducted by a private judge (arbitrator),  instead of a public trial. Arbitration can have many disadvantages to employees as compared to court, including:

  • Shortened hearings with no formal rules of evidence
  • Very limited ability to obtain documents and information from the employer before the hearing
  • Not public
  • Extremely limited appeal rights

Because employers often condition employment offers on signing an arbitration agreement, employees often do not truly have a choice whether to sign away their right to go to court should they decide sue their employer. The FAA has been broadly interpreted and reinforced by the United States Supreme Court in the past few decades, effectively denying employees their constitutional right to have their case heard in court.[1]

To combat forced arbitration the U.S. House of Representatives passed the Fair Arbitration Injustice Repeal (“FAIR” Act) in 2019. The FAIR Act would repeal the FAA, finally allowing employees to have their day in court. But the FAIR Act was never brought to the floor in the Republican-controlled Senate, and therefore didn’t become law.

On February 11, 2021, the FAIR Act was re-introduced to the House of Representatives (H.R. 963) by Representative Hank Johnson (D-GA). The FAIR Act is expected to pass the House again this year. Since Democrats now (narrowly) control the Senate, the FAIR Act is likely to make it out of committee in the Senate, and go to a full floor vote.

However, it is unclear whether the FAIR Act will garner enough Republican support in the Senate to overcome the filibuster, which remains in place, though the prohibition of forced arbitration in employment matters has received bipartisan support in the past.[2]

If you support ending forced arbitration, please contact your elected representative and encourage them to vote yes on the FAIR Act (H.R. 963): https://www.usa.gov/elected-officials.

Halunen Law supports the rights of employees to have full and free access to the court system. If you are subject to a forced arbitration agreement and feel you are being treated illegally in the workplace, the experienced employment law attorneys at Halunen Law are here to help. Contact us today for a free consultation.

Ross SAn experienced, tough employment attorney, Ross Stadheim is relentless in his pursuit of justice for clients who have been wronged by their employer. Comfortable in the courtroom and at the negotiation table, he represents employees who have experienced discrimination, harassment, retaliation, and other illegal conduct in the workplace.



[1] https://www.law.cornell.edu/constitution/seventh_amendment

[2] https://endforcedarbitration.medium.com/the-bipartisan-case-for-ending-forced-arbitration-485f73eeb635

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