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Franken introduces bill limiting mandatory arbitration

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in Employment Law,Human Resources

Sen. Al Franken has co-sponsored a bill with Rep. Hank Johnson (D-Ga.) that would limit what issues employers could force employees to arbitrate.

The bill, the Arbitration Fairness Act, seeks to reverse two key U.S. Supreme Court decisions that effectively bar class actions under arbitration agreements.

The bill would also bar arbitration agreements from including resolution of consumer, civil rights and antitrust claims.

Franken contends that the original Federal Arbitration Act only applies to disputes between businesses. However, court decisions over the years have expanded the law to cover interactions between businesses and consumers.

In particular, Franken cited decisions in AT&T v. Concepcion and American Express v. Italian Colors that upheld class-action waivers.

Under the proposed law, parties could only agree to arbitrate covered disputes once the disagreement arose, not before.

Note: Employers should have their attorneys review all arbitration agreement to ensure they comply with existing law.

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