Rep. Hank Johnson [D-Ga.], ranking member of the House Judiciary Subcommittee on Courts, Intellectual Property, Artificial Intelligence and the Internet, and Sen. Richard Blumenthal [D-Conn.] last week reintroduced the Forced Arbitration Injustice Repeal Act of 2025 (FAIR Act), which seeks to restore consumers’ and workers’ access to the courts.
Why it matters: Predispute arbitration clauses are common in financial services, healthcare, employment contracts, and even cell phone agreements. The FAIR Act would prohibit companies from requiring consumers, employees, and small businesses to resolve disputes through arbitration before those disputes arise. This could significantly reshape how banks, credit card issuers, fintechs, and collection agencies handle disputes with borrowers and customersfair-act-2025.
The details:
- Bill number: H.R. 5350 (House); S. 2799 (Senate).
- Scope: Prohibits predispute arbitration agreements and joint-action waivers in employment, consumer, antitrust, and civil rights disputes.
- Court authority: Disputes over applicability would be decided by courts, not arbitrators.
- Collective actions: Protects individuals’ rights to pursue class actions or collective actions in court.
- Effective date: Would apply to disputes arising on or after the date of enactment.
- Voluntary arbitration: Parties could still choose arbitration after a dispute occurs.
What they’re saying:
- Rep. Johnson: Called forced arbitration “an underhanded maneuver” that allows corporations to “avoid the only thing out there that could hold them accountable — the United States justice system.”
- Sen. Blumenthal: Said the legislation is about “basic fairness,” noting arbitration clauses “strip consumers and workers of their right to go to court.”
- Advocates: Groups including the Alliance for Justice, National Consumer Law Center, and Public Justice back the measure, arguing arbitration is a “rigged system” that keeps corporate misconduct hidden.
Between the lines: The FAIR Act passed the House in the 116th and 117th Congresses but stalled in the Senate. Its reintroduction comes amid heightened scrutiny of arbitration clauses in consumer finance, employment, and healthcare contracts.
What’s next: The bill has more than 50 cosponsors and strong support from consumer and worker advocacy organizations. Whether it advances will depend on Senate dynamics, where prior versions have failed to reach the floor.
