FAIR Act

IIB 116TH CONGRESS 1ST SESSION H. R. 1423 IN THE SENATE OF THE UNITED STATES SEPTEMBER 24, 2019 Received; read twice and referred to the Committee on the Judiciary AN ACT To amend title 9 of the United States Code with respect to arbitration. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 2 HR 1423 RFS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Forced Arbitration In- 2 justice Repeal Act’’ or the ‘‘FAIR Act’’. 3 SEC. 2. PURPOSES. 4 The purposes of this Act are to— 5 (1) prohibit predispute arbitration agreements 6 that force arbitration of future employment, con- 7 sumer, antitrust, or civil rights disputes; and 8 (2) prohibit agreements and practices that 9 interfere with the right of individuals, workers, and 10 small businesses to participate in a joint, class, or 11 collective action related to an employment, con- 12 sumer, antitrust, or civil rights dispute. 13 SEC. 3. ARBITRATION OF EMPLOYMENT, CONSUMER, ANTI- 14 TRUST, AND CIVIL RIGHTS DISPUTES. 15 (a) IN GENERAL.—Title 9 of the United States Code 16 is amended by adding at the end the following: 17 ‘‘CHAPTER 4—ARBITRATION OF EMPLOY- 18 MENT, CONSUMER, ANTITRUST, AND 19 CIVIL RIGHTS DISPUTES 20 ‘‘Sec. ‘‘401. Definitions. ‘‘402. No validity or enforceability. ‘‘§ 401. Definitions 21 ‘‘In this chapter— 22 ‘‘(1) the term ‘antitrust dispute’ means a dis- 23 pute— 24 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 3 HR 1423 RFS ‘‘(A) arising from an alleged violation of 1 the antitrust laws (as defined in subsection (a) 2 of the first section of the Clayton Act) or State 3 antitrust laws; and 4 ‘‘(B) in which the plaintiffs seek certifi- 5 cation as a class under rule 23 of the Federal 6 Rules of Civil Procedure or a comparable rule 7 or provision of State law; 8 ‘‘(2) the term ‘civil rights dispute’ means a dis- 9 pute— 10 ‘‘(A) arising from an alleged violation of— 11 ‘‘(i) the Constitution of the United 12 States or the constitution of a State; 13 ‘‘(ii) any Federal, State, or local law 14 that prohibits discrimination on the basis 15 of race, sex, age, gender identity, sexual 16 orientation, disability, religion, national or- 17 igin, or any legally protected status in edu- 18 cation, employment, credit, housing, public 19 accommodations and facilities, voting, vet- 20 erans or servicemembers, health care, or a 21 program funded or conducted by the Fed- 22 eral Government or State government, in- 23 cluding any law referred to or described in 24 section 62(e) of the Internal Revenue Code 25 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 4 HR 1423 RFS of 1986, including parts of such law not 1 explicitly referenced in such section but 2 that relate to protecting individuals on any 3 such basis; and 4 ‘‘(B) in which at least one party alleging a 5 violation described in subparagraph (A) is one 6 or more individuals (or their authorized rep- 7 resentative), including one or more individuals 8 seeking certification as a class under rule 23 of 9 the Federal Rules of Civil Procedure or a com- 10 parable rule or provision of State law; 11 ‘‘(3) the term ‘consumer dispute’ means a dis- 12 pute between— 13 ‘‘(A) one or more individuals who seek or 14 acquire real or personal property, services (in- 15 cluding services related to digital technology), 16 securities or other investments, money, or credit 17 for personal, family, or household purposes in- 18 cluding an individual or individuals who seek 19 certification as a class under rule 23 of the 20 Federal Rules of Civil Procedure or a com- 21 parable rule or provision of State law; and 22 ‘‘(B)(i) the seller or provider of such prop- 23 erty, services, securities or other investments, 24 money, or credit; or 25 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 5 HR 1423 RFS ‘‘(ii) a third party involved in the selling, 1 providing of, payment for, receipt or use of in- 2 formation about, or other relationship to any 3 such property, services, securities or other in- 4 vestments, money, or credit; 5 ‘‘(4) the term ‘employment dispute’ means a 6 dispute between one or more individuals (or their 7 authorized representative) and a person arising out 8 of or related to the work relationship or prospective 9 work relationship between them, including a dispute 10 regarding the terms of or payment for, advertising 11 of, recruiting for, referring of, arranging for, or dis- 12 cipline or discharge in connection with, such work, 13 regardless of whether the individual is or would be 14 classified as an employee or an independent con- 15 tractor with respect to such work, and including a 16 dispute arising under any law referred to or de- 17 scribed in section 62(e) of the Internal Revenue 18 Code of 1986, including parts of such law not explic- 19 itly referenced in such section but that relate to pro- 20 tecting individuals on any such basis, and including 21 a dispute in which an individual or individuals seek 22 certification as a class under rule 23 of the Federal 23 Rules of Civil Procedure or as a collective action 24 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 6 HR 1423 RFS under section 16(b) of the Fair Labor Standards 1 Act, or a comparable rule or provision of State law; 2 ‘‘(5) the term ‘predispute arbitration agree- 3 ment’ means an agreement to arbitrate a dispute 4 that has not yet arisen at the time of the making 5 of the agreement; and 6 ‘‘(6) the term ‘predispute joint-action waiver’ 7 means an agreement, whether or not part of a 8 predispute arbitration agreement, that would pro- 9 hibit, or waive the right of, one of the parties to the 10 agreement to participate in a joint, class, or collec- 11 tive action in a judicial, arbitral, administrative, or 12 other forum, concerning a dispute that has not yet 13 arisen at the time of the making of the agreement. 14 ‘‘§ 402. No validity or enforceability 15 ‘‘(a) IN GENERAL.—Notwithstanding any other pro- 16 vision of this title, no predispute arbitration agreement or 17 predispute joint-action waiver shall be valid or enforceable 18 with respect to an employment dispute, consumer dispute, 19 antitrust dispute, or civil rights dispute. 20 ‘‘(b) APPLICABILITY.— 21 ‘‘(1) IN GENERAL.—An issue as to whether this 22 chapter applies with respect to a dispute shall be de- 23 termined under Federal law. The applicability of this 24 chapter to an agreement to arbitrate and the validity 25 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 7 HR 1423 RFS and enforceability of an agreement to which this 1 chapter applies shall be determined by a court, rath- 2 er than an arbitrator, irrespective of whether the 3 party resisting arbitration challenges the arbitration 4 agreement specifically or in conjunction with other 5 terms of the contract containing such agreement, 6 and irrespective of whether the agreement purports 7 to delegate such determinations to an arbitrator. 8 ‘‘(2) COLLECTIVE BARGAINING AGREEMENTS.— 9 Nothing in this chapter shall apply to any arbitra- 10 tion provision in a contract between an employer and 11 a labor organization or between labor organizations, 12 except that no such arbitration provision shall have 13 the effect of waiving the right of a worker to seek 14 judicial enforcement of a right arising under a provi- 15 sion of the Constitution of the United States, a 16 State constitution, or a Federal or State statute, or 17 public policy arising therefrom.’’. 18 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 19 (1) IN GENERAL.—Title 9 of the United States 20 Code is amended— 21 (A) in section 1 by striking ‘‘of seamen,’’ 22 and all that follows through ‘‘interstate com- 23 merce’’ and inserting in its place ‘‘of individ- 24 uals, regardless of whether such individuals are 25 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 8 HR 1423 RFS designated as employees or independent con- 1 tractors for other purposes’’; 2 (B) in section 2 by inserting ‘‘or as other- 3 wise provided in chapter 4’’ before the period at 4 the end; 5 (C) in section 208— 6 (i) in the section heading by striking 7 ‘‘CHAPTER 1; RESIDUAL APPLICA- 8 TION’’ and inserting ‘‘APPLICATION’’; 9 and 10 (ii) by adding at the end the fol- 11 lowing: ‘‘This chapter applies to the extent 12 that this chapter is not in conflict with 13 chapter 4.’’; and 14 (D) in section 307— 15 (i) in the section heading by striking 16 ‘‘CHAPTER 1; RESIDUAL APPLICA- 17 TION’’ and inserting ‘‘APPLICATION’’; 18 and 19 (ii) by adding at the end the fol- 20 lowing: ‘‘This chapter applies to the extent 21 that this chapter is not in conflict with 22 chapter 4.’’. 23 (2) TABLE OF SECTIONS.— 24 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 9 HR 1423 RFS (A) CHAPTER 2.—The table of sections of 1 chapter 2 of title 9, United States Code, is 2 amended by striking the item relating to section 3 208 and inserting the following: 4 ‘‘208. Application.’’. (B) CHAPTER 3.—The table of sections of 5 chapter 3 of title 9, United States Code, is 6 amended by striking the item relating to section 7 307 and inserting the following: 8 ‘‘307. Application.’’. (3) TABLE OF CHAPTERS.—The table of chap- 9 ters of title 9, United States Code, is amended by 10 adding at the end the following: 11 ‘‘4. Arbitration of Employment, Consumer, Antitrust, and Civil Rights Disputes ........................................................................ 401’’. SEC. 4. EFFECTIVE DATE. 12 This Act, and the amendments made by this Act, 13 shall take effect on the date of enactment of this Act and 14 shall apply with respect to any dispute or claim that arises 15 or accrues on or after such date. 16 VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS 10 HR 1423 RFS SEC. 5. RULE OF CONSTRUCTION. 1 Nothing in this Act, or the amendments made by this 2 Act, shall be construed to prohibit the use of arbitration 3 on a voluntary basis after the dispute arises. 4 Passed the House of Representatives September 20, 2019. Attest: CHERYL L. JOHNSON, Clerk. VerDate Sep 11 2014 22:12 Sep 24, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.RFS H1423 kjohnson on DSK79L0C42 with BILLS