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"House Passes FAIR Act to Ban Pre-Dispute Arbitration Agreements"

June 12, 2022

Kellen Scott article on "House Passes FAIR Act to Ban Pre-Dispute Arbitration Agreements"

Shale Magazine

In a recent Shale Magazine article, Kellen Scott, shareholder in our Houston’s Labor & Employment and Commercial Litigation practices, discussed the U.S. House of Representatives passing the Forced Arbitration Injustice Repeal (FAIR) Act, H.R. 963. The bill, if enacted into law, would void all pre-dispute mandatory arbitration agreements in employment, antitrust, consumer, and civil rights matters. The FAIR Act also purports to eliminate pre-dispute class and collective action waiver provisions. 

If the FAIR Act were to pass in the Senate and be signed into law, it would nullify pre-dispute arbitration agreements and pre-dispute joint-action waivers with respect to employment, antitrust, consumer, and civil rights matters. For employment disputes, the Act would apply to discord surrounding the work relationship or prospective work relationship, including the terms of payment, discipline, or discharge. With a broad definition of employment and civil rights disputes, the Act would cover most employment-based claims, including discrimination, retaliation, and wage and hour disagreements, and apply to both employees and independent contractors.

According to Scott, “While the chances of the FAIR Act passing the Senate are uncertain, employers should closely monitor related developments. If enacted, the bill would go into effect immediately, significantly limiting their dispute resolution options, and likely affecting countless existing contracts. Employers should also remember that the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act has taken effect, and applies to sexual harassment and assault claims arising after the Act was adopted, regardless of when the arbitration agreement was signed. Any claims pending before the law came into effect are not covered and the pre-dispute agreements remain enforceable.”

To learn more, read the full article https://shalemag.com/house-passes-fair-act-to-ban-pre-dispute-arbitration-agreements