Text of US HB 1423 (2019)

I 116TH CONGRESS 1ST SESSION H. R. 1423 To amend title 9 of the United States Code with respect to arbitration. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 28, 2019 Mr. JOHNSON of Georgia (for himself, Ms. BARRAGA´N, Ms. BASS, Mr. BEYER, Mr. BLUMENAUER, Ms. BONAMICI, Mr. BRENDAN F. BOYLE of Pennsyl- vania, Mr. BRINDISI, Mr. BROWN of Maryland, Ms. BROWNLEY of Cali- fornia, Mr. CARBAJAL, Mr. CA´RDENAS, Mr. CARSON of Indiana, Mr. CARTWRIGHT, Mr. CASTEN of Illinois, Mr. CICILLINE, Mr. CISNEROS, Ms. CLARK of Massachusetts, Ms. CLARKE of New York, Mr. COHEN, Mr. CONNOLLY, Mr. COURTNEY, Mr. CUMMINGS, Mr. CUNNINGHAM, Mr. DANNY K. DAVIS of Illinois, Ms. DEGETTE, Ms. DELAURO, Ms. DELBENE, Mr. DELGADO, Mr. DEUTCH, Mrs. DINGELL, Mr. MICHAEL F. DOYLE of Pennsylvania, Mr. ENGEL, Ms. ESCOBAR, Ms. ESHOO, Mr. ESPAILLAT, Mr. EVANS, Ms. FRANKEL, Mr. GARAMENDI, Mr. GARCI´A of Illinois, Ms. GARCIA of Texas, Mr. GOLDEN, Mr. GOMEZ, Mr. GONZALEZ of Texas, Mr. GREEN of Texas, Mr. GRIJALVA, Ms. HAALAND, Mr. HARDER of California, Mr. HASTINGS, Mr. HIGGINS of New York, Ms. HILL of California, Ms. KENDRA S. HORN of Oklahoma, Mr. HORSFORD, Mr. HUFFMAN, Ms. JACKSON LEE, Ms. JAYAPAL, Mr. JEFFRIES, Ms. JOHNSON of Texas, Ms. KAPTUR, Mr. KENNEDY, Mr. KILDEE, Mr. KIM, Mrs. KIRKPATRICK, Mr. KRISHNAMOORTHI, Ms. KUSTER of New Hamp- shire, Mr. LANGEVIN, Mrs. LAWRENCE, Ms. LEE of California, Mrs. LEE of Nevada, Mr. LEVIN of Michigan, Mr. LEVIN of California, Mr. TED LIEU of California, Mr. LIPINSKI, Mr. LOEBSACK, Ms. LOFGREN, Mr. LOWENTHAL, Mr. LUJA´N, Mrs. LURIA, Mr. LYNCH, Mrs. CAROLYN B. MALONEY of New York, Mrs. MCBATH, Ms. MCCOLLUM, Mr. MCEACHIN, Mr. MCGOVERN, Mr. MCNERNEY, Ms. MENG, Ms. MOORE, Ms. MUCARSEL-POWELL, Mr. NADLER, Mrs. NAPOLITANO, Mr. NEGUSE, Ms. NORTON, Ms. OCASIO-CORTEZ, Ms. OMAR, Mr. PANETTA, Mr. PAPPAS, Mr. PASCRELL, Mr. PERLMUTTER, Ms. PINGREE, Mr. POCAN, Ms. PORTER, Ms. PRESSLEY, Mr. PRICE of North Carolina, Mr. RASKIN, Miss RICE of New York, Mr. RICHMOND, Mr. ROSE of New York, Mr. ROUDA, Ms. ROYBAL-ALLARD, Mr. RUSH, Mr. RYAN, Ms. SA´NCHEZ, Mr. SARBANES, Mr. SCOTT of Virginia, Mr. SERRANO, Ms. SCHAKOWSKY, Mr. SHERMAN, Mr. SIRES, Mr. SMITH of Washington, Mr. SOTO, Ms. SPEIER, Mr. SWALWELL of California, Mr. TAKANO, Ms. TLAIB, Mr. TONKO, Mrs. TRAHAN, Mr. VAN DREW, Mr. VELA, Ms. VELA´ZQUEZ, Mr. VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 2 •HR 1423 IH VISCLOSKY, Ms. WATERS, Ms. WASSERMAN SCHULTZ, Mrs. WATSON COLEMAN, Mr. WELCH, Ms. WILD, Mr. PALLONE, Ms. FINKENAUER, Ms. FUDGE, Mr. LAWSON of Florida, Mrs. DEMINGS, Mr. PAYNE, Mr. SABLAN, Mr. LEWIS, Mr. KHANNA, Ms. DEAN, Mrs. HAYES, Ms. WILSON of Florida, and Mr. DOGGETT) introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend title 9 of the United States Code with respect to arbitration. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Forced Arbitration In- 4 justice Repeal Act’’ or ‘‘FAIR Act’’. 5 SEC. 2. PURPOSES. 6 The purposes of this Act are to— 7 (1) prohibit predispute arbitration agreements 8 that force arbitration of future employment, con- 9 sumer, antitrust, or civil rights disputes, and 10 (2) prohibit agreements and practices that 11 interfere with the right of individuals, workers, and 12 small businesses to participate in a joint, class, or 13 collective action related to an employment, con- 14 sumer, antitrust, or civil rights dispute. 15 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 3 •HR 1423 IH SEC. 3. ARBITRATION OF EMPLOYMENT, CONSUMER, ANTI- 1 TRUST, AND CIVIL RIGHTS DISPUTES. 2 (a) IN GENERAL.—Title 9 of the United States Code 3 is amended by adding at the end the following: 4 ‘‘CHAPTER 4—ARBITRATION OF EMPLOY- 5 MENT, CONSUMER, ANTITRUST, AND 6 CIVIL RIGHTS DISPUTES 7 ‘‘401. Definitions. ‘‘402. No validity or enforceability. ‘‘§ 401. Definitions 8 ‘‘In this chapter— 9 ‘‘(1) the term ‘antitrust dispute’ means a dis- 10 pute— 11 ‘‘(A) arising from an alleged violation of 12 the antitrust laws (as defined in subsection (a) 13 of the first section of the Clayton Act) or State 14 antitrust laws; and 15 ‘‘(B) in which the plaintiffs seek certifi- 16 cation as a class under rule 23 of the Federal 17 Rules of Civil Procedure or a comparable rule 18 or provision of State law; 19 ‘‘(2) the term ‘civil rights dispute’ means a dis- 20 pute— 21 ‘‘(A) arising from an alleged violation of— 22 ‘‘(i) the Constitution of the United 23 States or the constitution of a State; 24 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 4 •HR 1423 IH ‘‘(ii) any Federal, State, or local law 1 that prohibits discrimination on the basis 2 of race, sex, age, gender identity, sexual 3 orientation, disability, religion, national or- 4 igin, or any legally protected status in edu- 5 cation, employment, credit, housing, public 6 accommodations and facilities, voting, vet- 7 erans or servicemembers, health care, or a 8 program funded or conducted by the Fed- 9 eral Government or State government, in- 10 cluding any law referred to or described in 11 section 62(e) of the Internal Revenue Code 12 of 1986, including parts of such law not 13 explicitly referenced in such section but 14 that relate to protecting individuals on any 15 such basis; and 16 ‘‘(B) in which at least 1 party alleging a 17 violation described in subparagraph (A) is one 18 or more individuals (or their authorized rep- 19 resentative), including one or more individuals 20 seeking certification as a class under rule 23 of 21 the Federal Rules of Civil Procedure or a com- 22 parable rule or provision of State law; 23 ‘‘(3) the term ‘consumer dispute’ means a dis- 24 pute between— 25 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 5 •HR 1423 IH ‘‘(A) one or more individuals who seek or 1 acquire real or personal property, services (in- 2 cluding services related to digital technology), 3 securities or other investments, money, or credit 4 for personal, family, or household purposes in- 5 cluding an individual or individuals who seek 6 certification as a class under rule 23 of the 7 Federal Rules of Civil Procedure or a com- 8 parable rule or provision of State law; and 9 ‘‘(B)(i) the seller or provider of such prop- 10 erty, services, securities or other investments, 11 money, or credit; or 12 ‘‘(ii) a third party involved in the selling, 13 providing of, payment for, receipt or use of in- 14 formation about, or other relationship to any 15 such property, services, securities or other in- 16 vestments, money, or credit; 17 ‘‘(4) the term ‘employment dispute’ means a 18 dispute between one or more individuals (or their 19 authorized representative) and a person arising out 20 of or related to the work relationship or prospective 21 work relationship between them, including a dispute 22 regarding the terms of or payment for, advertising 23 of, recruiting for, referring of, arranging for, or dis- 24 cipline or discharge in connection with, such work, 25 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 6 •HR 1423 IH regardless of whether the individual is or would be 1 classified as an employee or an independent con- 2 tractor with respect to such work, and including a 3 dispute arising under any law referred to or de- 4 scribed in section 62(e) of the Internal Revenue 5 Code of 1986, including parts of such law not explic- 6 itly referenced in such section but that relate to pro- 7 tecting individuals on any such basis, and including 8 a dispute in which an individual or individuals seek 9 certification as a class under rule 23 of the Federal 10 Rules of Civil Procedure or as a collective action 11 under section 16(b) of the Fair Labor Standards 12 Act, or a comparable rule or provision of State law; 13 ‘‘(5) the term ‘predispute arbitration agree- 14 ment’ means an agreement to arbitrate a dispute 15 that has not yet arisen at the time of the making 16 of the agreement; and 17 ‘‘(6) the term ‘predispute joint-action waiver’ 18 means an agreement, whether or not part of a 19 predispute arbitration agreement, that would pro- 20 hibit, or waive the right of, one of the parties to the 21 agreement to participate in a joint, class, or collec- 22 tive action in a judicial, arbitral, administrative, or 23 other forum, concerning a dispute that has not yet 24 arisen at the time of the making of the agreement. 25 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 7 •HR 1423 IH ‘‘§ 402. No validity or enforceability 1 ‘‘(a) IN GENERAL.—Notwithstanding any other pro- 2 vision of this title, no predispute arbitration agreement or 3 predispute joint-action waiver shall be valid or enforceable 4 with respect to an employment dispute, consumer dispute, 5 antitrust dispute, or civil rights dispute. 6 ‘‘(b) APPLICABILITY.— 7 ‘‘(1) IN GENERAL.—An issue as to whether this 8 chapter applies with respect to a dispute shall be de- 9 termined under Federal law. The applicability of this 10 chapter to an agreement to arbitrate and the validity 11 and enforceability of an agreement to which this 12 chapter applies shall be determined by a court, rath- 13 er than an arbitrator, irrespective of whether the 14 party resisting arbitration challenges the arbitration 15 agreement specifically or in conjunction with other 16 terms of the contract containing such agreement, 17 and irrespective of whether the agreement purports 18 to delegate such determinations to an arbitrator. 19 ‘‘(2) COLLECTIVE BARGAINING AGREEMENTS.— 20 Nothing in this chapter shall apply to any arbitra- 21 tion provision in a contract between an employer and 22 a labor organization or between labor organizations, 23 except that no such arbitration provision shall have 24 the effect of waiving the right of a worker to seek 25 judicial enforcement of a right arising under a provi- 26 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 8 •HR 1423 IH sion of the Constitution of the United States, a 1 State constitution, or a Federal or State statute, or 2 public policy arising therefrom.’’. 3 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 4 (1) IN GENERAL.—Title 9 of the United States 5 Code is amended— 6 (A) in section 1 by striking ‘‘of seamen,’’ 7 and all that follows through ‘‘interstate com- 8 merce,’’ and inserting in its place ‘‘of individ- 9 uals, regardless of whether such individuals are 10 designated as employees or independent con- 11 tractors for other purposes’’, 12 (B) in section 2 by inserting ‘‘or as other- 13 wise provided in chapter 4’’ before the period at 14 the end, 15 (C) in section 208— 16 (i) in the section heading by striking 17 ‘‘CHAPTER 1; RESIDUAL APPLICA- 18 TION’’ and inserting ‘‘APPLICATION’’, 19 and 20 (ii) by adding at the end the fol- 21 lowing: ‘‘This chapter applies to the extent 22 that this chapter is not in conflict with 23 chapter 4.’’, and 24 (D) in section 307— 25 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 9 •HR 1423 IH (i) in the section heading by striking 1 ‘‘CHAPTER 1; RESIDUAL APPLICA- 2 TION’’ and inserting ‘‘APPLICATION’’, 3 and 4 (ii) by adding at the end the fol- 5 lowing: ‘‘This chapter applies to the extent 6 that this chapter is not in conflict with 7 chapter 4.’’. 8 (2) TABLE OF SECTIONS.— 9 (A) CHAPTER 2.—The table of sections of 10 chapter 2 of title 9, United States Code, is 11 amended by striking the item relating to section 12 208 and inserting the following: 13 ‘‘208. Application.’’. (B) CHAPTER 3.—The table of sections of 14 chapter 3 of title 9, United States Code, is 15 amended by striking the item relating to section 16 307 and inserting the following: 17 ‘‘307. Application.’’. (3) TABLE OF CHAPTERS.—The table of chap- 18 ters of title 9, United States Code, is amended by 19 adding at the end the following: 20 ‘‘4. Arbitration of employment, consumer, antitrust, and civil rights disputes’’. SEC. 4. EFFECTIVE DATE. 21 This Act, and the amendments made by this Act, 22 shall take effect on the date of enactment of this Act and 23 VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS 10 •HR 1423 IH shall apply with respect to any dispute or claim that arises 1 or accrues on or after such date. 2 Æ VerDate Sep 11 2014 04:04 Mar 13, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H1423.IH H1423 kjohnson on DSK79L0C42 with BILLS