Congress Considers Arbitration

This month, U.S. Senator Patrick Leahy introduced the Restoring Statutory Rights Act and Interests of the States Act of 2016. If it becomes law, it would exempt from the Federal Arbitration Act (FAA) claims brought by individuals or small businesses arising from violations of federal or state law, the U.S. Constitution or a state constitution. Accordingly, it would permit these claims to proceed in a court of law. Apparently, under the measure, arbitration is still an option if the parties voluntarily choose to arbitrate a dispute after it arises. The bill would also allow federal and state courts to apply their respective jurisdictional laws concerning contract interpretation to find arbitration provisions unconscionable or unenforceable, notwithstanding the FAA. Finally, courts, not arbitrators, would have the essential task of determining and enforcing arbitrability. Congress is also considering the Arbitration Fairness Act of 2015, introduced last year by Senator Al Franken, which would prohibit the use of forced arbitration in consumer and employment disputes. That bill is still in committee, as is a companion bill in the House of Representatives. These Members of Congress take issue with recent majority decisions by the U.S. Supreme Court upholding federal preemption under the FAA. Arbitration remains a worthy alternative to litigation and perhaps these efforts, which pertain mainly to consumer disputes, will stop the backlash that has seemingly taken place and given the whole process a bad name. See more on S. 2506 and S. 1133 here-- www.congress.gov