Mr. King highlighted the numerous positive attributes of arbitration and alternative dispute resolution procedures, including greater efficiency as compared to litigation, specialized adjudicators more attuned to a claimant’s particular circumstances, and lower costs for all stakeholders. In particular, Mr. King noted the many deficiencies of class action litigation in comparison to arbitration processes and emphasized that arbitration agreements are backed by extensive Supreme Court precedent.
The Restoring Justice for Workers Act, (H.R. 4841), introduced this past July, formed the basis for the hearing. The Act would prohibit pre-dispute arbitration agreements that require arbitration of work disputes, prohibit retaliation against workers for refusing to arbitrate work disputes, and amend the National Labor Relations Act by making it an unfair labor practice to require arbitration, among other provisions. In his testimony, Mr. King argued that the bill takes the wrong approach towards addressing issues associated with arbitration agreements. He suggested that instead properly safeguarding procedural due process rights for all parties to arbitration processes and limiting the use of nondisclosure agreements would address shortcomings while preserving the benefits of arbitration.
Meanwhile, the House Judiciary Committee this week passed the similar Forced Arbitration Injustice Repeal Act (FAIR Act) (H.R. 963, S. 505), which would also ban mandatory pre-dispute arbitration agreements in employment and consumer contracts. A previous version of the FAIR Act passed the House in 2019 almost entirely along party lines. Given the Democratic majority in the House, it is very likely the FAIR Act would pass the House this session, but unlikely it will gain the 60 votes needed to pass the Senate.
Senate Judiciary Committee approves bipartisan bill banning enforcement of mandatory arbitration agreements relating to sexual harassment or assault. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (S. 2342), by Sen. Kirsten Gillibrand (D-NY) would allow employees to sue an employer rather than resolving a sexual harassment allegation through arbitration.
A recording of the hearing can be found here, and Mr. King’s full testimony can be found here.
