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

New #MeToo Arbitration Law to Be Cited in Push for Broader Bill

March 11, 2022, 10:26 AM

Supporters of a sweeping bill that would eliminate almost all pre-dispute arbitration agreements are calling out the recent vast bipartisan approval of a narrower law nullifying arbitration agreements only for #MeToo allegations.

The U.S. House is slated to consider the FAIR Act, or the Forced Arbitration Injustice Repeal Act (H.R. 963), as soon as next week. Lawmakers will then be forced to again grapple with their stances on arbitration, an alternative dispute resolution process that forestalls suing in open court.

The FAIR Act is far broader than H.R. 4445, or the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act , which President Joe Biden signed into law Mar. 3.

The FAIR Act would void all pre-dispute agreements, allowing individuals to sue in court rather than mandating they resolve any conflict in consumer, employment, antitrust, or civil rights matters through arbitration. The #MeToo law is much more targeted, vetoing those types agreements only for altercations involving sexual harassment or assault allegations.

BGOV Summary: H.R. 4445, Sexual Assault Arbitration (3)
BGOV Bill Summary: H.R. 963, Block Mandatory Arbitration

The FAIR Act’s outlook is not as rosy. It lacks the bipartisan backing—except for one Republican, Rep. Matt Gaetz of Florida—that benefited the #MeToo law. The Senate Judiciary Committee hasn’t acted on that chamber’s version of the FAIR Act (S. 505), sponsored by Sen. Richard Blumenthal (D-Conn.)

In 2019, the broader bill passed the House by a vote of 225 to 186, with two Republicans voting in favor. It didn’t receive a full Senate vote.

Same Argument, Broader Scope

Pro-worker organizations that oppose arbitration say that Republicans that supported the #MeToo law and don’t support the FAIR Act have a tough position to defend, given that the outcome of arbitration proceedings is so heavily weighted in favor of employers. Those in favor of pre-dispute arbitration agreements say the chasm between the two bills is too vast to even compare them.

“I think there’s a lot of daylight between these two,” said Evandro Gigante, a partner in New York with Proskauer Rose LLP. “I think you’ll find much more objection to the FAIR Act, just because of how broad it is and how it would essentially do away with any pre-dispute arbitration agreements.”

There is a carve-out for pre-dispute arbitration provisions in collective bargaining agreements in the bill. And neither law would ban arbitration outright—it would just have to be agreed to by both parties after a dispute has occurred, said Aaron Holt, a member with Cozen O’Connor.

Management attorneys believe arbitration has its benefits, and those won’t change, even if the FAIR Act becomes law, Gigante said.

“It’s a more streamlined process, it’s less expensive, less discovery,” he said. “Those are the benefits for arbitration that have always existed.”

Laura Flegel, legislative & public policy director for the National Employment Lawyers Association, said if that’s the case, all workers should have a right to choose how their disputes are resolved.

“If there are real benefits to arbitration, there’s absolutely no reason in the world to make it mandatory. Workers will choose that,” she said.

Splitting Hairs

Opponents of mandatory arbitration believe pre-dispute agreements should be banned in all contexts—not just for specific types of allegations like sexual harassment.

“The logic of the bill that just passed makes it obvious why the FAIR Act is necessary,” said F. Paul Bland, executive director of the left-leaning legal advocacy group Public Justice. “It makes no sense to say that arbitration is unfair for sexual harassment claims but is all right for cases where an employer pays a woman less than a man for the same work.”

Flegel agreed, saying the FAIR Act would provide protection against mandatory arbitration for “all kinds” of illegal workplace misconduct.

“The members of Congress who voted for the bill that just passed but are reluctant to support the FAIR Act seem to be saying that they don’t take seriously cases involving gender discrimination or violating the minimum wage laws,” Bland said.

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

To contact the editor responsible for this story: Fawn Johnson at fjohnson@bloombergindustry.com, Melissa B. Robinson at mrobinson@bloomberglaw.com