Members of the House of Representatives have given their approval to legislation governing pre-dispute contract arbitration agreements.
On a 222 to 209 vote, the House passed the Forced Arbitration Injustice Repeal Act that in its essence prohibits the enforcement of forced arbitration clauses in antitrust, civil rights, consumer, and labor disputes.
The legislation has been opposed by several business and industry associations, including the U.S. Chamber of Commerce which has charged that the “ultimate goal of this bill is to promote expensive class action litigation that does little to help businesses, consumers, and employees.”
A different perspective is offered by Rhode Island Congressman David Cicilline, chairman of the House Antitrust Subcommittee, who says that the legislation “prohibits the enforcement of forced arbitration clauses in consumer, civil rights, and antitrust disputes.”
If the bill is ultimately passed by the upper chamber, says the National Law Review, “arbitration agreements and class action waivers would be prohibited in a wide variety of agreements, implicating anything from an employment contract to a credit card agreement.”
The bill, which has also won the backing of President Biden, will specifically void all pre-dispute mandatory arbitration agreements in employment, antitrust, and consumer contracts.
Congressional observers say the legislation may face rough going in the Senate.
By Garry Boulard
