Core Provisions: This Act would amend the Federal Arbitration Act (FAA) to prohibit mandatory arbitration of employment claims unless provided under the terms of a collective bargaining agreement. The Act would make mandatory arbitration clauses in employment, consumer, and franchise agreements unenforceable. The Act also would overturn the Supreme Court’s recent decision in 14 Penn Plaza v. Pyett and would not permit employees to waive the right to take constitutional or statutory claims to court. In introducing the bill, Senator Russ Feingold explained that “the use of arbitration has grown exponentially” and, though arbitration “has advantages” it also “can be used as a weapon by the stronger party against the weaker party.” The bill addresses concerns that “mandatory arbitration clauses are slowly eroding the legal protections that should be available to all Americans.” Sen. Feingold emphasized that arbitration provisions should be utilized only when both parties knowingly agree to arbitrate after the dispute has arisen.
Status: Sen. Russ Feingold (D-WI) introduced S.931 on April 29, 2009, and it was referred to the Senate Judiciary Committee. Rep. Hank Johnson (D-GA) introduced a similar bill to the House (H.R. 1020) on February 12, 2009.