skip to main content

H.R. 1423: Forced Arbitration Injustice Repeal Act


The text of the bill below is as of Sep 13, 2019 (Reported by House Committee).

Summary of this bill

Should corporations be allowed to make customers sign contracts which waive their right to a lawsuit if anything goes awry?

Context

At least tens of millions of Americans are locked into contracts mandating “forced arbitration,” meaning that any legal disputes couldn’t be handled in a traditional court. These are common in everything from cellphone contracts to employment contracts with a boss.

As a Vox article explained, such provisions make it “impossible for workers to sue their bosses in court for sexual harassment, racial discrimination, wage theft, and nearly anything else. Workers are less likely to win their cases in private arbitration, and when they do win, they tend to ...


IB

Union Calendar No. 161

116th CONGRESS

1st Session

H. R. 1423

[Report No. 116–204]

IN THE HOUSE OF REPRESENTATIVES

February 28, 2019

(for himself, Ms. Barragán, Ms. Bass, Mr. Beyer, Mr. Blumenauer, Ms. Bonamici, Mr. Brendan F. Boyle of Pennsylvania, Mr. Brindisi, Mr. Brown of Maryland, Ms. Brownley of California, Mr. Carbajal, Mr. Cárdenas, Mr. Carson of Indiana, Mr. Cartwright, Mr. Casten of Illinois, Mr. Cicilline, Mr. Cisneros, Ms. Clark of Massachusetts, Ms. Clarke of New York, Mr. Cohen, Mr. Connolly, Mr. Courtney, Mr. Cummings, Mr. Cunningham, Mr. Danny K. Davis of Illinois, Ms. DeGette, Ms. DeLauro, Ms. DelBene, Mr. Delgado, Mr. Deutch, Mrs. Dingell, Mr. Michael F. Doyle of Pennsylvania, Mr. Engel, Ms. Escobar, Ms. Eshoo, Mr. Espaillat, Mr. Evans, Ms. Frankel, Mr. Garamendi, Mr. García of Illinois, Ms. Garcia of Texas, Mr. Golden, Mr. Gomez, Mr. Gonzalez of Texas, Mr. Green of Texas, Mr. Grijalva, Ms. Haaland, Mr. Harder of California, Mr. Hastings, Mr. Higgins of New York, Ms. Hill of California, Ms. Kendra S. Horn of Oklahoma, Mr. Horsford, Mr. Huffman, Ms. Jackson Lee, Ms. Jayapal, Mr. Jeffries, Ms. Johnson of Texas, Ms. Kaptur, Mr. Kennedy, Mr. Kildee, Mr. Kim, Mrs. Kirkpatrick, Mr. Krishnamoorthi, Ms. Kuster of New Hampshire, Mr. Langevin, Mrs. Lawrence, Ms. Lee of California, Mrs. Lee of Nevada, Mr. Levin of Michigan, Mr. Levin of California, Mr. Ted Lieu of California, Mr. Lipinski, Mr. Loebsack, Ms. Lofgren, Mr. Lowenthal, Mr. Luján, Mrs. Luria, Mr. Lynch, Mrs. Carolyn B. Maloney of New York, Mrs. McBath, Ms. McCollum, Mr. McEachin, Mr. McGovern, Mr. McNerney, Ms. Meng, Ms. Moore, Ms. Mucarsel-Powell, Mr. Nadler, Mrs. Napolitano, Mr. Neguse, Ms. Norton, Ms. Ocasio-Cortez, Ms. Omar, Mr. Panetta, Mr. Pappas, Mr. Pascrell, Mr. Perlmutter, Ms. Pingree, Mr. Pocan, Ms. Porter, Ms. Pressley, Mr. Price of North Carolina, Mr. Raskin, Miss Rice of New York, Mr. Richmond, Mr. Rose of New York, Mr. Rouda, Ms. Roybal-Allard, Mr. Rush, Mr. Ryan, Ms. Sánchez, Mr. Sarbanes, Mr. Scott of Virginia, Mr. Serrano, Ms. Schakowsky, Mr. Sherman, Mr. Sires, Mr. Smith of Washington, Mr. Soto, Ms. Speier, Mr. Swalwell of California, Mr. Takano, Ms. Tlaib, Mr. Tonko, Mrs. Trahan, Mr. Van Drew, Mr. Vela, Ms. Velázquez, Mr. Visclosky, Ms. Waters, Ms. Wasserman Schultz, Mrs. Watson Coleman, Mr. Welch, Ms. Wild, Mr. Pallone, Ms. Finkenauer, Ms. Fudge, Mr. Lawson of Florida, Mrs. Demings, Mr. Payne, Mr. Sablan, Mr. Lewis, Mr. Khanna, Ms. Dean, Mrs. Hayes, Ms. Wilson of Florida, and Mr. Doggett) introduced the following bill; which was referred to the Committee on the Judiciary

September 13, 2019

Additional sponsors: Mrs. Torres of California, Mrs. Davis of California, Ms. Craig, Mr. Aguilar, Ms. Judy Chu of California, Ms. Slotkin, Mr. Bishop of Georgia, Mr. DeFazio, Mr. Crow, Mr. Meeks, Mr. Gallego, Mrs. Axne, Mr. Heck, Mr. Ruppersberger, Mr. Allred, Ms. Adams, Mr. Yarmuth, Mr. Sean Patrick Maloney of New York, Ms. Scanlon, Mr. DeSaulnier, Mr. Malinowski, Mr. Clay, Ms. Blunt Rochester, Mr. Quigley, Mr. Cleaver, Mr. Foster, Ms. Kelly of Illinois, Mr. Kilmer, Mr. Norcross, Mr. Ruiz, Mr. Schiff, Ms. Shalala, Ms. Spanberger, Mr. Suozzi, Ms. Titus, Ms. Wexton, Mrs. Lowey, Ms. Sherrill, Mr. Himes, Mr. Schneider, Ms. Schrier, Ms. Castor of Florida, Mr. Veasey, Mr. Peters, Mr. Butterfield, Mr. Clyburn, Mrs. Fletcher, Mr. Thompson of Mississippi, Mr. Larson of Connecticut, Mr. Castro of Texas, Ms. Matsui, Mr. O'Hal­leran, Mr. Crist, Mr. Phillips, Mr. Trone, Mr. Morelle, Mr. Moulton, Mr. Stanton, Ms. Davids of Kansas, Mr. Kind, Mr. Lamb, Ms. Houlahan, Mr. Neal, Mr. Keating, Mr. Schrader, Ms. Underwood, Mr. Larsen of Washington, Ms. Stevens, Mr. Gaetz, Ms. Torres Small of New Mexico, Mr. Costa, Mrs. Bustos, Mr. Gottheimer, Ms. Gabbard, and Mr. Vargas


September 13, 2019

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

Strike out all after the enacting clause and insert the part printed in italic

For text of introduced bill, see copy of bill as introduced on February 28, 2019


A BILL

To amend title 9 of the United States Code with respect to arbitration.


1.

Short title

This Act may be cited as the Forced Arbitration Injustice Repeal Act or the FAIR Act.

2.

Purposes

The purposes of this Act are to—

(1)

prohibit predispute arbitration agreements that force arbitration of future employment, consumer, antitrust, or civil rights disputes, and

(2)

prohibit agreements and practices that interfere with the right of individuals, workers, and small businesses to participate in a joint, class, or collective action related to an employment, consumer, antitrust, or civil rights dispute.

3.

Arbitration of employment, consumer, antitrust, and civil rights disputes

(a)

In general

Title 9 of the United States Code is amended by adding at the end the following:

4

Arbitration of Employment, Consumer, Antitrust, and Civil Rights Disputes

401. Definitions.

402. No validity or enforceability.

401.

Definitions

In this chapter—

(1)

the term antitrust dispute means a dispute—

(A)

arising from an alleged violation of the antitrust laws (as defined in subsection (a) of the first section of the Clayton Act) or State antitrust laws; and

(B)

in which the plaintiffs seek certification as a class under rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law;

(2)

the term civil rights dispute means a dispute—

(A)

arising from an alleged violation of—

(i)

the Constitution of the United States or the constitution of a State;

(ii)

any Federal, State, or local law that prohibits discrimination on the basis of race, sex, age, gender identity, sexual orientation, disability, religion, national origin, or any legally protected status in education, employment, credit, housing, public accommodations and facilities, voting, veterans or servicemembers, health care, or a program funded or conducted by the Federal Government or State government, including any law referred to or described in section 62(e) of the Internal Revenue Code of 1986, including parts of such law not explicitly referenced in such section but that relate to protecting individuals on any such basis; and

(B)

in which at least 1 party alleging a violation described in subparagraph (A) is one or more individuals (or their authorized representative), including one or more individuals seeking certification as a class under rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law;

(3)

the term consumer dispute means a dispute between—

(A)

one or more individuals who seek or acquire real or personal property, services (including services related to digital technology), securities or other investments, money, or credit for personal, family, or household purposes including an individual or individuals who seek certification as a class under rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law; and

(B)
(i)

the seller or provider of such property, services, securities or other investments, money, or credit; or

(ii)

a third party involved in the selling, providing of, payment for, receipt or use of information about, or other relationship to any such property, services, securities or other investments, money, or credit;

(4)

the term employment dispute means a dispute between one or more individuals (or their authorized representative) and a person arising out of or related to the work relationship or prospective work relationship between them, including a dispute regarding the terms of or payment for, advertising of, recruiting for, referring of, arranging for, or discipline or discharge in connection with, such work, regardless of whether the individual is or would be classified as an employee or an independent contractor with respect to such work, and including a dispute arising under any law referred to or described in section 62(e) of the Internal Revenue Code of 1986, including parts of such law not explicitly referenced in such section but that relate to protecting individuals on any such basis, and including a dispute in which an individual or individuals seek certification as a class under rule 23 of the Federal Rules of Civil Procedure or as a collective action under section 16(b) of the Fair Labor Standards Act, or a comparable rule or provision of State law;

(5)

the term predispute arbitration agreement means an agreement to arbitrate a dispute that has not yet arisen at the time of the making of the agreement; and

(6)

the term predispute joint-action waiver means an agreement, whether or not part of a predispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement.

402.

No validity or enforceability

(a)

In general

Notwithstanding any other provision of this title, no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to an employment dispute, consumer dispute, antitrust dispute, or civil rights dispute.

(b)

Applicability

(1)

In general

An issue as to whether this chapter applies with respect to a dispute shall be determined under Federal law. The applicability of this chapter to an agreement to arbitrate and the validity and enforceability of an agreement to which this chapter applies shall be determined by a court, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically or in conjunction with other terms of the contract containing such agreement, and irrespective of whether the agreement purports to delegate such determinations to an arbitrator.

(2)

Collective bargaining agreements

Nothing in this chapter shall apply to any arbitration provision in a contract between an employer and a labor organization or between labor organizations, except that no such arbitration provision shall have the effect of waiving the right of a worker to seek judicial enforcement of a right arising under a provision of the Constitution of the United States, a State constitution, or a Federal or State statute, or public policy arising therefrom.

.

(b)

Technical and conforming amendments

(1)

In general

Title 9 of the United States Code is amended—

(A)

in section 1 by striking of seamen, and all that follows through interstate commerce, and inserting in its place of individuals, regardless of whether such individuals are designated as employees or independent contractors for other purposes,

(B)

in section 2 by inserting or as otherwise provided in chapter 4 before the period at the end,

(C)

in section 208—

(i)

in the section heading by striking Chapter 1; residual application and inserting Application, and

(ii)

by adding at the end the following: This chapter applies to the extent that this chapter is not in conflict with chapter 4., and

(D)

in section 307—

(i)

in the section heading by striking Chapter 1; residual application and inserting Application, and

(ii)

by adding at the end the following: This chapter applies to the extent that this chapter is not in conflict with chapter 4..

(2)

Table of sections

(A)

Chapter 2

The table of sections of chapter 2 of title 9, United States Code, is amended by striking the item relating to section 208 and inserting the following:

208. Application.

.

(B)

Chapter 3

The table of sections of chapter 3 of title 9, United States Code, is amended by striking the item relating to section 307 and inserting the following:

307. Application.

.

(3)

Table of chapters

The table of chapters of title 9, United States Code, is amended by adding at the end the following:

4. Arbitration of employment, consumer, antitrust, and civil rights disputes

.

4.

Effective date

This Act, and the amendments made by this Act, shall take effect on the date of enactment of this Act and shall apply with respect to any dispute or claim that arises or accrues on or after such date.

September 13, 2019

Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed