HR5350-119

What This Bill Does

The FAIR Act amends title 9 to make predispute arbitration agreements and predispute joint-action waivers invalid and unenforceable for employment, consumer, antitrust, and civil-rights disputes. It defines antitrust disputes as alleged federal or state antitrust violations where plaintiffs seek class certification. Civil-rights disputes include constitutional claims and federal, state, or local anti-discrimination laws involving race, sex, age, gender identity, sexual orientation, disability, religion, national origin, or other protected status in education, employment, credit, housing, public accommodations, voting, veterans or servicemembers, health care, or government-funded programs. Consumer disputes cover personal, family, or household property, services, digital technology services, investments, money, or credit, including third parties involved in selling, payment, data use, or related relationships. Employment disputes cover work and prospective work relationships, including pay, recruitment, referral, discipline, discharge, and independent-contractor classifications. Courts, not arbitrators, decide whether the chapter applies and whether covered arbitration agreements or joint-action waivers are valid, even if the agreement delegates that decision to an arbitrator. The bill does not apply to arbitration provisions in contracts between employers and labor organizations or between labor organizations, but those provisions cannot waive a worker's right to judicial enforcement of constitutional, state constitutional, federal statutory, state statutory, or public-policy rights.

Who Benefits and How

Workers benefit because employers cannot enforce predispute arbitration clauses or class-action waivers for covered employment disputes. Consumers benefit because companies cannot force covered consumer claims into arbitration before a dispute arises. Civil rights plaintiffs benefit because courts remain available for covered discrimination and constitutional claims. Antitrust class plaintiffs benefit because covered class claims are not blocked by predispute arbitration or joint-action waivers.

Who Bears the Burden and How

Employers lose a major tool for forcing employment disputes into individual arbitration. Consumer-facing companies lose enforceability of predispute arbitration clauses and joint-action waivers in covered consumer disputes. Arbitration providers may lose case volume in employment, consumer, antitrust class, and civil-rights disputes. Federal courts must decide applicability and enforceability questions that agreements may have delegated to arbitrators.

Key Provisions

• Bars enforcement of predispute arbitration agreements for employment, consumer, antitrust, and civil-rights disputes.
• Blocks predispute joint-action waivers for the same dispute categories.
• Requires courts rather than arbitrators to decide whether the chapter applies and whether covered agreements are enforceable.
• Protects collective-bargaining arbitration while preserving workers' judicial enforcement of constitutional and statutory rights.