Two members of Congress are seeking to expand the reach of a federal ban on pre-dispute arbitration agreements to cover nearly all consumer contracts. The proposed legislation would have a widespread effect, barring the use of pre-dispute arbitration provisions in credit card agreements, auto loan agreements, wireless telephone service contracts, and many other types of consumer-facing agreements that often contain such provisions.
On April 29, 2015, Senator Al Franken (D-Minnesota) and Representative Hank Johnson (D-Georgia) introduced the Arbitration Fairness Act of 2015 (“AFA”) (S. 1133; H.R. 2087). The proposed legislation would amend the Federal Arbitration Act, 9 U.S.C. §§ 1, et seq. (“FAA”), to prohibit parties from entering into agreements to arbitrate consumer disputes in advance of a dispute arising. The bar on pre-dispute arbitration agreements would also apply in the context of employer, antitrust, and civil rights disputes.