A US legislation that would prohibit mandatory arbitration agreements in employment, consumer, and other contracts is set to be enacted.
The Bill advanced out of the House Judiciary Committee September 10, with a vote of 22 to 14. It now heads to the House floor.
The Forced Arbitration Injustice Repeal Act (H.R. 1423, S. 610) would invalidate a pre-dispute arbitration agreement if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute. The proposal was introduced in February by Rep. Hank Johnson (D-Ga.).
Mandatory arbitration clauses are common in many contracts and generally compel employees or customers to waive their right to sue in…
The purpose of this Act is to prohibit pre-dispute arbitration agreements that force arbitration of future employment, consumer, antitrust, or civil rights disputes.
It also aims at prohibiting 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.
Democratic lawmakers unveiled the bill after the mandatory arbitration process was found to facing increasing abuse especially by employers.
The lawmakers seized on the recent negative public attention on employers’ use of mandatory arbitration for handling sexual harassment and other on-the-job issues.
Source: Bloomberg Law