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Bill to Exclude Employment-Related Claims From Mandatory Arbitration

In May 2009, Senator Russell Feingold (D-Wis) introduced the Arbitration Fairness Act (S. 931) which bars mandatory arbitration of employment-related and civil rights claims unless required by a collective bargaining agreement. A companion bill is also pending in the House of Representatives (H.R. 2010). This legislative action aims to overturn the Supreme Court decision in Circuit City Stores v. Adams, 532 U.S. 105 (2001) which upheld mandatory arbitration of Title VII cases employment discrimination cases.

Proponents of the bills claim that the mandatory arbitration of employment and civil rights claims results in the loss of major rights of employees because the arbitration agreements are typically signed when employees are new with no bargaining power. They also claim that such agreements are typically not the result of a fair and bargained exchanged. Instead, they are given to new employees to sign on a take-it-or leave-it basis with measures that are significantly unfair to employees.

Opponents of the measures claim that arbitration is an efficient and cost-effective manner of disposing employment disputes that otherwise would be very lengthy and costly if required to go through the court systems. Mandatory arbitration, they claim, result in quicker resolution and recovery for employees with less tension and employee turnover.

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