This week the House of Representatives passed a bill that would affects a contract provision signed by tens of millions of workers – binding arbitration agreements.
For many workers, a condition of their job is their acceptance of what businesses call “alternative dispute resolution.” Instead of suing over certain issues if an employee alleges a problem at work, these agreements require the employee and employer to go through binding arbitration. This is a less formal, less expensive means of settling a dispute. However, opponents of binding arbitration say that it deprives employees of their rights to sue over harassment, discrimination, and other issues.
By a vote of 225-186, the House of Representatives passed H.R. 1423. Here is how VoteSpotter describes the bill:
To make unenforceable provisions in contracts that require the parties to pursue arbitration first on disputes over employment, consumer, antitrust, or civil rights issues. The bill also prohibits agreements that limit class action lawsuits.
As noted in this description, it goes beyond merely prohibiting binding arbitration for certain issues. It also prohibits employers from requiring employees to waive their rights to join in a class action lawsuits over employment practices. A 2018 Supreme Court case ruled that current law allows employers to request that employees sign such contracts.
Backers of this legislation say that it’s necessary to restore the rights of employees to sue over what they consider abuses by employers. They argue that binding arbitration usually works in favor of employers. Opponents counter that lawsuits are expensive and, at times, frivolous. They say that banning the use of binding arbitration will lead to more lawsuits, with the result being higher costs passed to consumers and fewer people hired.
While some Republicans in the Senate have signaled support for curbing binding arbitration, the House legislation passed with only two Republicans voting in favor of it. Senate Majority Leader Mitch McConnell may not schedule this bill for consideration in that body.
Do you think that employers should be able to ask employees to sign binding arbitration contracts?