The U.S. House of Representatives passed H.R. 963 (the “Bill”) yesterday in a 222-209 heavily partisan vote. The Bill, also called the “Forced Arbitration Injustice Repeal” or “FAIR,” would nullify most pre-dispute forced employment arbitration agreements if passed by the Senate and signed into law by the President.

Arbitration provisions are often utilized by employers to reduce costs and expedite resolution of private employment disputes (e.g., discrimination claims and pay inequities). Such provisions, when included in written agreements with employees, require an employee to seek resolution for workplace misconduct in private proceedings (i.e., arbitrations) with appointed arbitrators rather judges resolving such matters in a public courthouse.

The Bill’s supporters argue that the playing field needs to be leveled because pre-dispute arbitration agreements allegedly favor employers to the immediate disadvantage of employees. Conversely, the Bill’s opponents maintain that arbitration is a low-cost and impartial method to resolve disputes efficiently in terms of time and costs- as opposed to litigation which can take years and is undoubtedly expensive. Opponents further argue that the Bill’s broad scope would further burden employers already taking precautions to avoid workplace misconduct.

It is currently unclear if the Senate will pass the Bill as written. The attorneys at Farhang & Medcoff (“F&M”) will continue to monitor the situation and provide updates as developments occur. If you have questions about how this Bill may impact your business, or any other legal queries, your trusted legal advisors at F&M are here to help.

This writing is for informational purposes only and does not constitute legal advice. No attorney-client relationship is formed by the dissemination of this writing.