On February 12, 2009, House Representative Henry “Hank” Johnson (D-GA) re-introduced legislation relating to the Federal Arbitration Act, which is now called the Arbitration Fairness Act of 2009. In June 2008, we first reported on the initial introduction of this legislation, the Arbitration Fairness Act of 2007 (click here for previous post). The new Act seeks to invalidate all pre-dispute arbitration agreements that require the arbitration of any employment, consumer, franchise dispute, or conflict arising under any statute intended to protect civil rights.
The Act also provides that the validity or enforceability of an arbitration agreement shall be determined by a court, under federal law, rather than an arbitrator, irrespective of whether the party resisting arbitration challenges the arbitration agreement specifically, or in conjunction with, other terms of the contract containing such agreement. It should also be noted that arbitration provisions in collective bargaining agreements are exempted from this Act.
The Act will take effect on the day of its enactment and will apply to any dispute or claim arising on or after that date.
On March 16, 2009, the Act was referred to the Subcommittee on Commercial and Administrative Law. No further action has been taken, but we will continue to follow this issue and post further updates on InsureReinsure.com.