Senate Holds Hearing on Mandatory Arbitration Standards

April 05, 2019

In a Senate Judiciary Committee hearing on the use of arbitration agreements for resolving employment and consumer disputes, Chairman Lindsey Graham (R-SC) asked whether Congress should establish uniform standards for arbitration clauses, a potential alternative to the proposed outright ban of such clauses.

Democrats have introduced a number of bills (S. 610 / H.R. 1423) that would prohibit mandatory arbitration agreements in employment disputes, and for consumer, antitrust, and civil rights claims.

Sen. Graham said he wants to “look long and hard about how the system works" and consider changes to increase transparency in arbitration, or limit arbitration rights for “repeat” offenders.  A few Republican senators on the committee expressed similar concerns.

Bipartisan compromise?  Sen. Graham said he scheduled the hearing to see if Congress can “develop some solutions.”  He has previously cosponsored the Ending Forced Arbitration of Sexual Harassment Act (S. 2203 – 115th) along with Sen. Lisa Murkowski (R-AK) and Sen. John Kennedy (R-LA).

The last time the Senate Judiciary Committee discussed arbitration agreements was in 2013, when Democrats controlled the Senate.

Outlook:  Despite strong support for arbitration agreements by the business community, the hearing demonstrated that some Republicans would be willing to impose restrictions on them, if not a total ban.  However, further action by the Republican Senate appears unlikely for now.