A bill introduced on February 12 would significantly restrict the ability for employers to arbitrate employment disputes. The Arbitration Fairness Act of 2009 (H.R. 1020) -- introduced by Rep. Henry “Hank” Johnson (D-GA) and cosponsored by 36 others – would amend the Federal Arbitration Act to invalidate all predispute arbitration agreements that require the arbitration of any employment, consumer, or franchise dispute, or conflict arising under any statute intended to protect civil rights. This Act would not apply to arbitration provisions contained in collective bargaining agreements.

This legislation broadly defines “employment dispute” as “a dispute between an employer and employee arising out of the relationship of employer and employee as defined by the Fair Labor Standards Act.” The definitions of “consumer dispute” and “franchise dispute” are similarly broad enough to encompass virtually any legal conflict. If enacted, this bill would essentially eliminate arbitration as a litigation alternative for employee claims – as well as those brought by clients/customers – unless the parties agree to the arbitral forum post-dispute. The provisions of this bill would take effect on the date of enactment, and would apply to any dispute or claim arising on or after that date.

This bill has been referred to the House Committee on the Judiciary.