Bloomberg Law
Free Newsletter Sign Up
Bloomberg Law
Welcome
Go
Free Newsletter Sign Up

U.S. House Passes Bill Banning Mandatory Arbitration Agreements

March 17, 2022, 8:43 PM

The U.S. House passed a bill that would void all pre-dispute mandatory arbitration agreements in employment, antitrust, consumer, and other matters, following on the heels of a new law that specifically banned the agreements for #MeToo allegations.

The House voted 222-209 to advance the FAIR Act (H.R. 963), moving closer to expanding a bill President Joe Biden signed into law that bars the enforcement of the agreements for workers alleging sexual harassment or assault.

The #MeToo law (P.L. 117-90) had bipartisan backing from its introduction, as compared to the FAIR Act which only has one Republican sponsor, Rep. Matt Gaetz (R-Fla.).

Backers of the broader bill said it’s tricky to say arbitration is harmful for workers alleging sexual harassment but acceptable for those alleging race discrimination or unequal pay. Opponents say the new #MeToo law is vastly different from the FAIR Act.

“When our fellow Americans get a cellphone contract, when they get cable, they get internet, they are subject to forced arbitration,” Gaetz said on the House floor before the vote. “People end up getting really screwed in the process.”

The arbitration bill’s outlook in the Senate is uncertain given its sweeping scope. FAIR is an acronym for the measure’s formal title: the “Forced Arbitration Injustice Repeal” Act.

The White House endorses the act, saying such provisions conceal “companies’ wrongdoing from other consumers who are choosing between products and workers who are deciding between jobs.”

“Eliminating the use of these clauses would increase incentives for employers to prevent and remedy problems in the workplace and in their business practices,” the White House said in a March 15 statement of administration policy said.

BGOV Bill Summary: H.R. 963, Block Mandatory Arbitration

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editor responsible for this story: Andrew Harris at aharris@bloomberglaw.com