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.

Congress Responds Rapidly to Block CFPB Rule Banning Mandatory Arbitration Clauses

On Monday, July 10, the Consumer Financial Protection Bureau announced its new rule preventing banks and credit card companies from using mandatory arbitration clauses in new customer accounts.

On Tuesday, July 11, and as predicted on “CPR Speaks,” Congress moved to stop the CFPB final rule. Arkansas Republican Sen. Tom Cotton announced he was drafting a resolution to get the new CFPB rule rescinded using the Congressional Review Act. Pennsylvania Republican Sen. Pat Toomey, Chair of the Subcommittee on Financial Institutions and Consumer Protection, is reported to be considering a similar step.

The newly popular 1996 Congressional Review Act—see the “CPR Speaks” link above–provides expedited  procedures through which the Senate may overrule regulations issued by federal agencies by enacting a joint resolution.

Characterizing the CFPB as having gone “rogue,” and its new rule as an “anti-business regulation,” Cotton is stressing the benefits of arbitration, as well as consumers’ capacity to make business decisions.

Financial Services Committee Chairman Jeb Hensarling, R., Texas, is also publicly criticizing the rule as bureaucratic and beneficial only to class action trial attorneys. He is urging Congress to work with President Trump to reform the CFPB and excessive administration by government. As also mentioned in yesterday’s post, in April Hensarling proposed H.R. 10, the Financial CHOICE Act of 2017, which would repeal the CFPB’s authority to restrict arbitration. The bill has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.

It remains to be seen whether the CFPB’s new rule will survive these and other potential congressional and court challenges. Much will depend upon the Senate and how many Republicans switch sides on this issue. Please stay tuned to this space for important developments.