Is this the End of Pre-Dispute Arbitration Agreements?

Posted on August 24, 2007

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Three bills have been introduced in the U.S. House of Representatives and the U.S. Senate over the past few months that, if enacted, would make pre-dispute agreements to arbitrate unenforceable.

If the bills were to be made into law, it would have a great impact on the way employers now handle employment disputes since many employers have adopted mandatory dispute resolution programs that include the requirement that employees arbitrate their disputes.

The Arbitration Fairness Act of 2007 (HR 3010 and S. 1782) would ban mandatory arbitration agreements in the consumer, franchise and civil rights contexts.  The Consumer Fairness Act of 2007 (HR 1443) would treat arbitration clauses which are unilaterally imposed on consumers as an unfair and deceptive trade practice and prohibit their use in consumer transactions.

The critics of arbitration agreements argue that individuals are unfairly strong-armed into giving up their rights to have their disputes heard by a jury or judge, and that because entire industries have adopted such programs, individuals have no choice but to accept them.  The bills also make reference to the alleged bias of private arbitration companies who are under pressure to favor corporations that provide continuous business to the arbitration companies, as well as the lack of judicial review, in support of enacting such legislation.

While we will report on any major developments, if you would like to keep up-to-date on these bills as they make their way through committee, see WashingtonWatch.com.

N. DeWayne Pope, DeWayne Pope LLC

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