Tuesday, February 25, 2014


Welcome to my blog, Revising the Fair Arbitration Act!

This blog will focus on one of my projects, creating a federal bill that provides consumers and employees in arbitration due process protections.  The bill is based on Jeff Sessions's Fair Arbitration Act, introduced most recently in 2011 (and previously introduced as early as 2000).

The Supreme Court's recent rulings in AT&T Mobility v. Concepcion (2011) and American Express Co. v. Italian Colors Restaurant (2013) have clarified the applicability of federal arbitration law to contracts.  In Concepcion, the Supreme Court ruled that the Federal Arbitration Act preempts state law (such as unconscionability) that has the effect of requiring class resolution of consumer claims even when there is an arbitration agreement.  The effect is to allow businesses to prevent consumer and employee class actions by requiring arbitration in contracts.  The American Express decision held that arbitration of a statutory claim cannot be avoided merely because the claim would be excessively costly to prove in individual arbitration.  Naturally, concerns have arisen over not only how the decisions will affect the resolution of claims brought by consumer and employees, but also how the broad preemption doctrine announced by the Supreme Court fits in with efforts by states, arbitration organizations, and others to ensure due process in arbitration.

There have been some renewed movements for federal action to make certain pre-dispute arbitration agreements unenforceable (most notably the Arbitration Fairness Act).  However, the Arbitration Fairness Act is a rather extreme solution to the problems created by consumer and employee arbitration, so it is unlikely to become law in the foreseeable future.  The Fair Arbitration Act, which imposes standards that must be met for an arbitration agreement to be enforceable, is not appreciated in both the popular and academic presses.  Nevertheless, it is at least the template for a workable solution.  To be fair, there are certainly flaws in the legislation, but those are flaws that can be fixed through a careful examination of the problems with arbitration and how to fix them without destroying arbitration's benefits.

In the following posts, I will present my version of the Fair Arbitration Act, explaining the reasons for making the decisions I made in changing the bill.  Future posts may also focus on relevant issues in consumer and employee arbitration that may not be covered by the mainstream media or other sources.

Finally, I appreciate your comments on any of my posts.  My commenting policy is to allow all posts that are not spam and are not illegal under U.S. law, even if I happen to disagree.  I hope that your insights will help make my project successful.

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