Statement | Forced arbitration

News from EPI EPI applauds House’s passage of the FAIR Act

Today, the House of Representatives passed the Forced Arbitration Injustice Repeal (FAIR) Act, which would ban forced arbitration in consumer and workplace disputes. This legislation is a crucial first step toward ending the growing practice of forced arbitration. While the egregious practice of forced arbitration in consumer disputes has gotten a great deal of attention, there has been less attention paid to forced arbitration in workplace disputes. The problem, however, is enormous. Over the last several decades, more and more workers have become subject to forced arbitration agreements. In 2017, 56.2% of private sector nonunion workers were subject to forced arbitration agreements, and a recent EPI analysis projects that by 2024, that share will rise to more than 80%. Forced arbitration bars workers’ access to the courts for all types of employment-related claims and is part of a long and growing list of tactics used by employers to keep workers’ bargaining power weak and their wages down. Current law allows employers to require workers to sign an agreement stating that if the employer violates the workers’ rights—for example, doesn’t pay them the wages they are owed, doesn’t follow safety standards, or sexually harasses them—they must resolve the dispute in a closed-door process that favors the employer. Ensuring that workers are able to meaningfully enforce their rights and are not blocked from court by forced arbitration clauses is a critical reform.

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