Core Provisions: On February 12, 2009, Rep. Henry C. Johnson (D-GA) and 36 cosponsors introduced the Arbitration Fairness Act of 2009 (H.R. 1020). The bill would amend the Federal Arbitration Act to invalidate all predispute arbitration agreements mandating the arbitration of any employment, consumer, or franchise dispute, as well as any disputes arising under any civil rights statutes. The bill does not apply to arbitration provisions adopted as part of a collective bargaining agreement.
Intended to minimize the use of prearbitration agreements between parties of unequal bargaining power, the bill broadly defines “employment dispute” to include any “dispute between an employer and employee arising out of the relationship of employer and employee” as defined by the Fair Labor Standards Act.
The bill provides that challenges to the enforceability of an arbitration agreement would be heard by a federal court, and not by an arbitrator.
While the 2009 Arbitration Fairness Act mirrors its 2007 predecessor (H.R. 3010, S. 1782) from the 110th Congress in several respects, the current bill omits past provisions invalidating predispute agreements requiring the arbitration of disputes arising under any statute intended to regulate contracts or transactions between parties of unequal bargaining power. The Arbitration Fairness Act of 2007 was sent to the House Judiciary Committee and the Senate Subcommittee on the Constitution, but neither committee ever voted on the bill.
Status: The 2009 bill has been referred to the House Judiciary Committee. A hearing has not yet been scheduled.