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Basics About the Arbitration Fairness Act of 2011

Wednesday, August, 17, 2011

The concept of an Arbitration Fairness Act goes back several years, but the legislation has never yet been passed into law.  The latest incarnation of the concept is embodied in the Arbitration Fairness Act of 2011, proposed legislation that has been introduced into Congress in the current session but which has yet to reach a floor vote in either house. 


Arbitration Fairness Act Cued by Three Court Decisions

The impetus this time for the act is three separate decisions of the U.S. Supreme Court during the last year.  These decisions served to expand the use of mandatory arbitration clauses in both consumer contracts and employment contracts for non-unionized workers.  The last such decision, AT&T Mobility vs. Concepcion, will allow such contracts to prohibit class arbitration, which would require all arbitration claims to be handled on an individual basis.


Several members of Congress have taken issue with the Supreme Court's interpretation of applicable federal laws.  To this end, they propose passing a new federal law that will clarify some issues that frequently arise regarding the use of arbitration as a dispute resolution tool.  More than ten senators and more than 60 members of the House of Representatives have signed on in support of the Arbitration Fairness Act of 2011, with Senator Al Franken of Minnesota leading the effort in conjunction with Representatives Richard Blumenthal of Connecticut and Hank Johnson of Georgia.


The act would not necessarily apply to copyright arbitration, or similar arbitration forms.