New Jersey Employment Lawyers Blog
The rampant abuse of arbitration agreements, and the injustice that these agreements have created for employees, is finally being recognized and addressed. The Forced Arbitration Injustice Repeal Act, or “FAIR Act,” was introduced to the United States House of Representatives by Representatives Hank Johnson and Richard Blumenthal on February 28, 2019. The FAIR Act would, among other things, outlaw forced arbitration clauses in employment contracts or agreements. The FAIR Act would, instead, require that the employee agree to arbitration only after the dispute has arisen in order for any arbitration agreement to be enforceable.
If passed as written, the Fair Act would not have retroactive effect as to disputes that arose prior to its passing; however, the bill would have retroactive effect in that it would apply to arbitration clauses in employment contracts that were entered into prior to the bill’s passing. In other words, if the bill passes, all disputes arising thereafter would not be subject to an arbitration clause included in an employment agreement.
The current state of arbitration across the country is a classic case of too much of a good thing. In theory, arbitration would serve as an option afforded to both parties to a dispute, with each party given the opportunity to weigh the pros and cons of that option to determine if they wished to have their dispute resolved through arbitration. In reality, however, this is not how arbitration works most of the time. In the majority of arbitrations, one party was not truly given an option and did not understand anything about the process prior to “agreeing” to have any future dispute resolved through that process. As a result, many people never get their day in court, because they unwittingly signed away their right to do so.