Bill Banning Arbitration Clauses Passes House

A bill that would ban forced arbitration clauses in employment, consumer, civil rights, and antitrust cases passed the House of Representatives yesterday and is now headed to the Senate for its consideration.

The bill, H.R. 963, the Forced Arbitration Injustice Repeal Act of 2022, or FAIR Act, passed by a vote of 222-209. This is the second time that the bill has passed in the House. During the previous Congressional session, the bill passed by a vote of 225 to 186, but did not make it out of the Senate. The bill has introduced in the Senate by Sen. Richard Blumenthal [D-Conn.] and has 39 cosponsors. A similar measure seeking to ban arbitration clauses was introduced in the Senate by Sen. Sherrod Brown [D-Ohio], the chairman of the Senate Banking Committee, last week.

Rep. Hank Johnson [D-Ga.], the sponsor of the bill, said that arbitration forces consumers to sign away their rights because that’s what big corporations want.

“My bill will restore fairness to the American justice system by reasserting an individual’s right to access the court system,” said Rep. Johnson, in a statement. “The FAIR Act would ensure that men and women contracting with more powerful entities aren’t forced into private arbitration, where the bigger party often has the advantage of choosing the arbitrator in an unappealable decision.”

When announcing his proposed legislation, Sen. Brown noted that consumers win in 9% of cases that are handled by an arbitrator. Arbitration is a dispute resolution process that occurs outside of the courts. An unbiased third party hears arguments from both sides and renders a binding decision, which has limited rights to be appealed.

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