Last week, by a vote of 22-14 (with one Republican voting for the bill), the House Judiciary Committee passed H.R. 1423, the “Forced Arbitration Injustice Repeal Act.” A Senate companion bill (S. 610) was introduced in February 2019 and referred to the Senate Judiciary Committee. No action has been taken on the Senate bill.
The House bill would amend the Federal Arbitration Act to provide that “no predispute arbitration agreement or predispute joint-action waiver shall be valid or enforceable with respect to an employment dispute, consumer dispute, or civil rights dispute.”
The term “predispute arbitration agreement” is defined as “an agreement to arbitrate a dispute that has not yet arisen at the time of the making of the agreement.” The term “predispute joint-action waiver” is defined as “an agreement, whether or not part of a predispute arbitration agreement, that would prohibit, or waive the right of, one of the parties to the agreement to participate in a joint, class, or collective action in a judicial, arbitral, administrative, or other forum, concerning a dispute that has not yet arisen at the time of the making of the agreement.”
A “consumer dispute” is defined as “a dispute between (A) one or more individuals who seek or acquire real or personal property, services (including services related to digital technology), securities or other investments, money, or credit for personal, family, or household purposes including an individual or individuals who seek certification as a class under rule 23 of the Federal Rules of Civil Procedure or a comparable rule or provision of State law, and (B) (i) the seller or provider of such property, services, securities or other investments, money, or credit; or (ii) a third party involved in the selling, providing of, payment for, receipt or use of information about, or other relationship to any such property, services, securities or other investment, money, or credit.”
We do not expect the House bill to move forward in the Senate.