FAIR Act of 2023

I 118TH CONGRESS 1ST SESSION H. R. 2953 To amend title 9 of the United States Code with respect to arbitration. IN THE HOUSE OF REPRESENTATIVES APRIL 27, 2023 Mr. JOHNSON of Georgia (for himself, Ms. TLAIB, Ms. SCHAKOWSKY, Ms. VELA´ZQUEZ, Mr. DOGGETT, Ms. MOORE of Wisconsin, Mr. THANEDAR, Mr. MFUME, Ms. PINGREE, Mr. NADLER, Mr. SCHIFF, Ms. ROSS, Ms. LOIS FRANKEL of Florida, Mr. BEYER, Ms. NORTON, Ms. BROWNLEY, Ms. BONAMICI, Mr. BOYLE of Pennsylvania, Ms. SCANLON, Mr. SWALWELL, Mr. CARSON, Mr. EVANS, Ms. BUSH, Ms. CROCKETT, Mr. GARCI´A of Illinois, Mr. FOSTER, Mr. SARBANES, Mr. QUIGLEY, Mr. DESAULNIER, Mr. ROBERT GARCIA of California, Mrs. TRAHAN, Mr. CA´RDENAS, Mr. GOMEZ, Mr. HIGGINS of New York, Ms. DEGETTE, Ms. PORTER, Mr. CASAR, Mr. TRONE, Mr. STANTON, Mr. PHILLIPS, Ms. MCCOLLUM, Mr. ESPAILLAT, Mr. ALLRED, Mr. GOLDEN of Maine, Mr. COHEN, Mr. CASTEN, Ms. GARCIA of Texas, Ms. STEVENS, Mrs. MCBATH, Mr. PAYNE, Ms. KAMLAGER-DOVE, Ms. DEAN of Pennsylvania, Ms. PRESSLEY, Ms. WEXTON, Ms. LEE of California, Mr. SHERMAN, Mr. SCOTT of Virginia, Mr. GOLDMAN of New York, Ms. OMAR, Mr. GOTTHEIMER, Mrs. MCCLELLAN, Ms. JAYAPAL, Mr. CARTWRIGHT, Mr. KRISHNAMOORTHI, Mr. CARTER of Louisiana, Mr. KILDEE, Ms. SA´NCHEZ, Ms. LEGER FERNANDEZ, Mr. POCAN, Mr. TONKO, Ms. WIL- SON of Florida, Ms. WILLIAMS of Georgia, Ms. KUSTER, Mr. CLEAVER, Ms. BARRAGA´N, Mr. NORCROSS, Ms. BLUNT ROCHESTER, Mr. KEATING, Mr. SMITH of Washington, Ms. SCHOLTEN, Mr. SOTO, Mr. KILMER, Mr. NEGUSE, and Mr. MORELLE) introduced the following bill; which was re- ferred to the Committee on the Judiciary A BILL To amend title 9 of the United States Code with respect to arbitration. VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2953 IH Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Forced Arbitration In- 4 justice Repeal Act of 2023’’ or the ‘‘FAIR Act of 2023’’. 5 SEC. 2. PURPOSES. 6 The purposes of this Act are to— 7 (1) prohibit predispute arbitration agreements 8 that force arbitration of future employment, con- 9 sumer, antitrust, or civil rights disputes; and 10 (2) prohibit agreements and practices that 11 interfere with the right of individuals, workers, and 12 small businesses to participate in a joint, class, or 13 collective action related to an employment, con- 14 sumer, antitrust, or civil rights dispute. 15 SEC. 3. ARBITRATION OF EMPLOYMENT, CONSUMER, ANTI- 16 TRUST, AND CIVIL RIGHTS DISPUTES. 17 (a) IN GENERAL.—Title 9 of the United States Code 18 is amended by adding at the end the following: 19 ‘‘CHAPTER 5—ARBITRATION OF EMPLOY- 20 MENT, CONSUMER, ANTITRUST, AND 21 CIVIL RIGHTS DISPUTES 22 ‘‘Sec. ‘‘501. Definitions. ‘‘502. No validity or enforceability. ‘‘§ 501. Definitions 23 ‘‘In this chapter— 24 VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2953 IH ‘‘(1) the term ‘antitrust dispute’ means a dis- 1 pute— 2 ‘‘(A) arising from an alleged violation of 3 the antitrust laws (as defined in subsection (a) 4 of the first section of the Clayton Act) or State 5 antitrust laws; and 6 ‘‘(B) in which the plaintiffs seek certifi- 7 cation as a class under rule 23 of the Federal 8 Rules of Civil Procedure or a comparable rule 9 or provision of State law; 10 ‘‘(2) the term ‘civil rights dispute’ means a dis- 11 pute— 12 ‘‘(A) arising from an alleged violation of— 13 ‘‘(i) the Constitution of the United 14 States or the constitution of a State; 15 ‘‘(ii) any Federal, State, or local law 16 that prohibits discrimination on the basis 17 of race, sex, age, gender identity, sexual 18 orientation, disability, religion, national or- 19 igin, or any legally protected status in edu- 20 cation, employment, credit, housing, public 21 accommodations and facilities, voting, vet- 22 erans or servicemembers, health care, or a 23 program funded or conducted by the Fed- 24 eral Government or State government, in- 25 VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2953 IH cluding any law referred to or described in 1 section 62(e) of the Internal Revenue Code 2 of 1986, including parts of such law not 3 explicitly referenced in such section but 4 that relate to protecting individuals on any 5 such basis; and 6 ‘‘(B) in which at least one party alleging a 7 violation described in subparagraph (A) is one 8 or more individuals (or their authorized rep- 9 resentative), including one or more individuals 10 seeking certification as a class under rule 23 of 11 the Federal Rules of Civil Procedure or a com- 12 parable rule or provision of State law; 13 ‘‘(3) the term ‘consumer dispute’ means a dis- 14 pute between— 15 ‘‘(A) one or more individuals who seek or 16 acquire real or personal property, services (in- 17 cluding services related to digital technology), 18 securities or other investments, money, or credit 19 for personal, family, or household purposes in- 20 cluding an individual or individuals who seek 21 certification as a class under rule 23 of the 22 Federal Rules of Civil Procedure or a com- 23 parable rule or provision of State law; and 24 VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2953 IH ‘‘(B)(i) the seller or provider of such prop- 1 erty, services, securities or other investments, 2 money, or credit; or 3 ‘‘(ii) a third party involved in the selling, 4 providing of, payment for, receipt or use of in- 5 formation about, or other relationship to any 6 such property, services, securities or other in- 7 vestments, money, or credit; 8 ‘‘(4) the term ‘employment dispute’ means a 9 dispute between one or more individuals (or their 10 authorized representative) and a person arising out 11 of or related to the work relationship or prospective 12 work relationship between them, including a dispute 13 regarding the terms of or payment for, advertising 14 of, recruiting for, referring of, arranging for, or dis- 15 cipline or discharge in connection with, such work, 16 regardless of whether the individual is or would be 17 classified as an employee or an independent con- 18 tractor with respect to such work, and including a 19 dispute arising under any law referred to or de- 20 scribed in section 62(e) of the Internal Revenue 21 Code of 1986, including parts of such law not explic- 22 itly referenced in such section but that relate to pro- 23 tecting individuals on any such basis, and including 24 a dispute in which an individual or individuals seek 25 VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2953 IH certification as a class under rule 23 of the Federal 1 Rules of Civil Procedure or as a collective action 2 under section 16(b) of the Fair Labor Standards 3 Act, or a comparable rule or provision of State law; 4 ‘‘(5) the term ‘predispute arbitration agree- 5 ment’ means an agreement to arbitrate a dispute 6 that has not yet arisen at the time of the making 7 of the agreement; and 8 ‘‘(6) the term ‘predispute joint-action waiver’ 9 means an agreement, whether or not part of a 10 predispute arbitration agreement, that would pro- 11 hibit, or waive the right of, one of the parties to the 12 agreement to participate in a joint, class, or collec- 13 tive action in a judicial, arbitral, administrative, or 14 other forum, concerning a dispute that has not yet 15 arisen at the time of the making of the agreement. 16 ‘‘§ 502. No validity or enforceability 17 ‘‘(a) IN GENERAL.—Notwithstanding any other pro- 18 vision of this title, no predispute arbitration agreement or 19 predispute joint-action waiver shall be valid or enforceable 20 with respect to an employment dispute, consumer dispute, 21 antitrust dispute, or civil rights dispute. 22 ‘‘(b) APPLICABILITY.— 23 ‘‘(1) IN GENERAL.—An issue as to whether this 24 chapter applies with respect to a dispute shall be de- 25 VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2953 IH termined under Federal law. The applicability of this 1 chapter to an agreement to arbitrate and the validity 2 and enforceability of an agreement to which this 3 chapter applies shall be determined by a court, rath- 4 er than an arbitrator, irrespective of whether the 5 party resisting arbitration challenges the arbitration 6 agreement specifically or in conjunction with other 7 terms of the contract containing such agreement, 8 and irrespective of whether the agreement purports 9 to delegate such determinations to an arbitrator. 10 ‘‘(2) COLLECTIVE BARGAINING AGREEMENTS.— 11 Nothing in this chapter shall apply to any arbitra- 12 tion provision in a contract between an employer and 13 a labor organization or between labor organizations, 14 except that no such arbitration provision shall have 15 the effect of waiving the right of a worker to seek 16 judicial enforcement of a right arising under a provi- 17 sion of the Constitution of the United States, a 18 State constitution, or a Federal or State statute, or 19 public policy arising therefrom.’’. 20 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 21 (1) IN GENERAL.—Title 9 of the United States 22 Code is amended— 23 (A) in section 1 by striking ‘‘of seamen,’’ 24 and all that follows through ‘‘interstate com- 25 VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2953 IH merce’’ and inserting in its place ‘‘of individ- 1 uals, regardless of whether such individuals are 2 designated as employees or independent con- 3 tractors for other purposes’’; 4 (B) in section 2 by striking ‘‘chapter 4’’ 5 and inserting ‘‘chapter 4 or 5’’; 6 (C) in section 208 by striking ‘‘chapter 4’’ 7 and inserting ‘‘chapter 4 or 5’’; and 8 (D) in section 307 by striking ‘‘chapter 4’’ 9 and inserting ‘‘chapter 4 or 5’’. 10 (2) TABLE OF CHAPTERS.—The table of chap- 11 ters of title 9 of the United States Code is amended 12 by adding at the end the following: 13 ‘‘5. Arbitration of Employment, Consumer, Antitrust, and Civil Rights Disputes ........................................................................ 501’’. SEC. 4. EFFECTIVE DATE. 14 This Act, and the amendments made by this Act, 15 shall take effect on the date of enactment of this Act and 16 shall apply with respect to any dispute or claim that arises 17 or accrues on or after such date. 18 SEC. 5. RULE OF CONSTRUCTION. 19 Nothing in this Act, or the amendments made by this 20 Act, shall be construed to prohibit the use of arbitration 21 on a voluntary basis after the dispute arises. 22 Æ VerDate Sep 11 2014 02:18 May 09, 2023 Jkt 039200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2953.IH H2953 kjohnson on DSK79L0C42PROD with BILLS