On March 17, 2022, the United States House of Representatives passed the Forced Arbitration Injustice Repeal Act (“FAIR Act”). If enacted into law, the FAIR Act would prohibit businesses from requiring workers and patrons to air disputes against them in arbitration (as opposed to in court). The FAIR Act comes on the heels of a recent anti-arbitration law (i.e., Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act) that President Biden signed this year—a law much narrower in scope than the FAIR Act.
More specifically, the FAIR Act, if signed into law, would prohibit businesses from requiring mandatory arbitration in relation to:
- Actual or potential work relationships with employees and independent contractors;
- Claims between consumers, sellers, and even third parties related to such transactions;
- Alleged violations of state or federal antitrust laws; or
- Alleged violations of constitutional rights or anti-discrimination laws.
This bill would cause a ripple effect for employers and businesses nationwide. It is unclear, however, if the bill will be able to gain the support it needs to pass in the Senate and ultimately be enacted into law. If the bill passes it will cause a landmark change to the current legal landscape and settled expectations of businesses and employees throughout the nation and may cause an infusion of lawsuits to an already-stretched federal and state judiciary. We will continue to monitor the developments on this bill as it moves to the next phase with the Senate.
If you need assistance to further understand how this impacts your business, please contact us at info@mnklawyers.com.
This material is provided for informational purposes only. It is not intended to constitute legal advice, nor does it create a client-lawyer relationship between MNK Law and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material.
