NELA Supports The Forced Arbitration Injustice Repeal Act (FAIR Act)

The Forced Arbitration Injustice Repeal Act (FAIR Act, S. 505/H.R. 963), introduced in the 117th Congress, will end forced arbitration by amending the Federal Arbitration Act (FAA). The bill provides that no pre-dispute arbitration clause is valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute. Mandatory arbitration agreed to under a collective bargaining agreement would not be affected by the FAIR Act. The bill also prohibits interference with the right of individuals, workers, and small businesses to participate in a joint, class, or collective action related to employment, consumer, antitrust, or civil rights disputes. This long-overdue legislation is critical to working people in all sectors of the economy. If passed, it will protect workers who face wage theft, discrimination, harassment, or other illegal treatment in the workplace.

NELA has prioritized ending forced arbitration of employment claims for more than two decades. After years of inaction on this issue, passage of the Forced Arbitration Injustice Repeal (FAIR) Act in the House in the 116th Congress was a major victory. NELA will continue to work with allies to educate Members of Congress and gain passage of the FAIR Act in the 117th Congress.

We Need Your Help to Get the FAIR Act Passed. Urge Your Legislators to Support the Bill.

Calling, or when possible, visiting, your members of Congress to talk about forced arbitration and the FAIR Act, as well as expressing our enthusiastic support of the bill is a critical part of NELA’s workers’ rights advocacy. Whether you reach out to thank your member for their support or to urge them to support the FAIR Act for the first time, your outreach is very important. Your personal contact (call, Zoom, or in-person visit) is an opportunity to educate your Members of Congress/Staffer about forced arbitration, and makes yours and NELA’s positon clear. It also offers an opportunity for NELA to listen to and learn about the Congressperson’s views, questions, and concerns.

• If your Members of Congress are co-sponsors, thank them for joining the fight to restore access to justice for working people.
• If your Members of Congress are not supporters, please contact them and let them know why passage of the FAIR Act is vital to your clients, and working people across the country.

Talking Points

• Forced arbitration takes advantage of the inherently unequal bargaining power between individual employees and their employers. These clauses are not negotiable by employees—workers must accept or lose their ability to earn a paycheck.
• Forced arbitration clauses are frequently buried in the fine print of employment applications, employee manuals, pension plans, and even emails. A large number of employees who are bound by forced arbitration clauses are unaware of the rights they inadvertently gave up until they seek redress for illegal mistreatment in their workplace.
• Forced arbitration has led to widespread claim suppression. One comprehensive study shows[1] that forced arbitration clauses lead to as many as 722,000 claims of employer wrongdoing going unpursued annually because employees find the arbitration process so unfair and so daunting that they never file a claim.
  One comprehensive study shows[1] that forced arbitration clauses lead to as many as 722,000 claims of employer wrongdoing going unpursued annually because employees find the arbitration process so unfair and so daunting that they never file a claim.
• Forced arbitration undermines the federal laws that Congress worked hard to pass: laws such as the Civil Rights Act of 1964 and the Fair Labor Standards Act. These laws are only meaningful if they can be enforced – but the claim suppression that results from forced arbitration effectively shields employers from being held accountable when they violate federal laws.
• The FAIR Act does not ban voluntary arbitration. NELA supports arbitration when it is voluntarily and knowingly agreed upon by the employee post-dispute and governed by adequate safeguards of fairness and due process, or pursuant to a collective bargaining agreement negotiated between employers and unions. Forced arbitration has none of those characteristics. It is not knowingly agreed upon; it is not governed by the safeguards that are present in a courtroom; and employees have no opportunity to negotiate whether or not they are bound by a forced arbitration clause.
• Forced arbitration in the workplace is endemic to the private sector workforce, affecting every segment of the workforce from minimum wage workers to highly compensated professionals. In 2018, 56.2% of nonunion private-sector employees were subject to forced arbitration procedures, a dramatic increase from just 2% in 1991.[2] One report predicts that 80% of non-unionized workers in the United States will be subject to forced arbitration by 2024.[3]
• Congress has already passed several laws, with bipartisan support, to ban forced arbitration for disputes involving auto dealers, poultry and livestock producers, and certain employees of federal contractors. The time has come for Congress to outlaw forced arbitration for all of America’s workers.

[1] Cynthia Estlund, The Black Hole of Mandatory Arbitration, 96 N.C. L. Rev. 679, 689 (2018).

[2] https://www.epi.org/publication/the-growing-use-of-mandatory-arbitration-access-to-the-courts-is-now-barred-for-more-than-60-million-american-workers/

[3] https://files.epi.org/uploads/Unchecked-Corporate-Power-web.pdf

Our FAIR Act Toolkit includes everything you need to prepare for a meeting with your members of Congress.

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