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9.20.2019

U.S. House of Representatives Passes FAIR Act

Just a week following H.R. 1423’s reporting to the full House from the Judiciary Committee, the United States House of Representatives passed the Forced Arbitration Injustice Reform Act (“FAIR Act”) on September 20, 2019.  The vote was 225-186.  Rep. Henry C. Johnson, a Democrat representing the 4th District of Georgia, introduced the bill in February, 2019, and it is now co-sponsored by 222 members of Congress.  The purposes of the FAIR Act are (1) to prohibit predispute agreements forcing arbitration of employment, consumer, antitrust, and civil rights disputes; and (2) to prohibit agreements that interfere with individuals, workers, and small businesses rights to participate in class or collective actions relating to employment, consumer, antitrust, or civil rights disputes.

H.R. 1423 is not the first attempt by lawmakers to curb forced arbitration, but it is the first successful effort to pass through the House.  Passage through the Senate will be a challenge.  In the past, such bills have been generally opposed by Republicans.  However, there have been recent indications that at least some are taking notice of the evidence that arbitration disfavors everyday Americans who attempt to vindicate their rights through the private dispute resolution system.  The FAIR Act would protect such individuals or small businesses, who are in no position to negotiate arbitration agreements, from being forced into them.  It would not preclude businesses from negotiating and entering into such agreements, if they determine it preferable.

The text of the bill as reported to and passed by the House can be found here: https://www.congress.gov/116/bills/hr1423/BILLS-116hr1423ih.xml

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