Roundup: Legislation with Mediation or Arbitration…Maybe for the future?

By Elena Gurevich

According to Congress.gov, the official website for U.S. federal legislative information, and Govtrack.us, an organization that tracks legislation and votes, several bills have been introduced in the U.S. House of Representatives and the Senate this year that touch upon arbitration or mediation.

Out of five bills introduced, only one deals with mediation as well as arbitration. Although (according to Govtrack) it is highly unlikely that these bills will be passed by the present Congress, they might get a shot in the future under a different Congress.

H.R. 156—Labor Relations First Contract Negotiations Act of 2017. The bill, introduced on Jan. 3 by Rep. Gene Green, D., Texas, has a prognosis of passage of 1%, according to Govtrack, whose projection estimates are supplied by Skopos Labs, a New York software company. The bill amends the National Labor Relations Act to address initial contract negotiation. Specifically, the bill requires mediation if an employer and a newly certified union have not reached a collective bargaining agreement within 60 days. “Either the employer or the union may request binding arbitration if the parties have not reached an agreement within 30 days of selecting a mediator.”

See https://www.congress.gov/bill/115th-congress/house-bill/156.

H.R. 832—Arbitration Transparency Act of 2017, with a 3% chance of passage, requires that an arbitration proceeding between a consumer and a financial institution, in a dispute involving a consumer financial product or service, must be open to the public. It was introduced Feb. 2 by Rep. Michael Capuano, D., Mass.

See: https://www.congress.gov/bill/115th-congress/house-bill/832?r=10

H.R. 1374—Arbitration Fairness Act of 2017 was introduced on March 7. The bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment, consumer, antitrust, or civil rights dispute. The bill, sponsored by Rep. Hank Johnson, D., Ga., has a 3% chance of passing, according to Govtrack.

See: https://www.congress.gov/bill/115th-congress/house-bill/1374?r=7

  1. 542—Safety Over Arbitration Act of 2017 was introduced on March 7, with a current prognosis of 9%. The Congress.gov summary says the bill “prohibits the use of arbitration whenever a contract between an individual and another party requires arbitration to resolve a claim or controversy alleging facts relevant to a hazard to public health or safety unless all parties to the controversy consent in writing after the controversy arises.” The sponsor is Sheldon Whitehouse, D., R.I.

See: https://www.congress.gov/bill/115th-congress/senate-bill/542?r=22

  1. 647—Mandatory Arbitration Transparency Act of 2017. The bill has only a 2% chance of passing in this Congress, according Govtrack and Skopos Labs. The bill amends U.S.C. Title 9 on arbitration. According to the Congress.gov summary, the bill “prohibits predispute arbitration agreements from containing a confidentiality clause regarding an employment, consumer, or civil rights dispute that could be interpreted to prohibit a party from: (1) making a communication in a manner such that the prohibition would violate a whistle-blower statute; or (2) reporting or making a communication about tortious conduct, unlawful conduct, or issues of public policy or public concern. But the prohibition shall not apply if a party can demonstrate a confidentiality interest that significantly outweighs the private and public interest in disclosure.” Richard Blumenthal, D., Conn., is the sponsor.

See: https://www.congress.gov/bill/115th-congress/senate-bill/647

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The author is a CPR Institute 2017 Fall Intern.

Arbitration Fairness Act of 2015 (AFA): An Overly Simplistic Approach?

The Arbitration Fairness Act of 2015 (AFA), recently introduced by Senator Al Franken and Representative Hank Johnson, would amend the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq. (FAA), to eliminate mandatory, pre-dispute arbitration clauses in employment, antitrust or civil rights matters—as well as all nearly all consumer contracts, for such things as cars, credit cards and cell phones. Allowing parties to agree to arbitration only after a dispute has arisen, the AFA would apply to “any dispute or claim that arises on or after” the date of AFA’s passing. The legislation would also give federal courts—instead of arbitrators—the authority to rule on an agreement’s validity and enforceability.

This is not the first legislative effort to narrow the use of pre-dispute arbitration agreements; somewhat similar bills were introduced in 2011 and then again in 2013, but neither made it out of committee. While some are applauding this step towards banning what they refer to as “forced” arbitration, others have expressed concerns that requiring parties to agree to arbitration only after a dispute has already arisen might take away the parties’ critical ability to utilize  arbitration preventatively, planning for it in order to avoid disputes in the first place. Others question the wisdom of transferring these responsibilities away from arbitrators and to an already beleaguered court system. Finally, while the AFA does not expressly prohibit businesses from entering into pre-dispute arbitration agreements with other businesses, some question the  effect this might have on the enforceability of arbitration  in business contexts where there is potential consumer application.

Institute for Conflict Prevention & Resolution (CPR) President & CEO Noah Hanft observed that, “Just as with litigation, there are circumstances where arbitration may be abused. But, if practiced properly and thoughtfully, as it should be, arbitration remains a  more effective, efficient and less costly way to resolve certain disputes—a result from which consumers can clearly benefit as well.”

Hanft concluded, “Care must be taken that any legislation aimed at protecting abuses in the use of arbitration not be  overly simplistic or condemn a practice that has brought real benefits in a multitude of circumstances around the world. Even advocates of tort reform that decry litigation abuses  don’t propose sweeping bans on certain types of litigation.”