Arbitration Fairness Act of 2018

Summary: Arbitration Fairness Act of 2018 This bill prohibits a predispute arbitration agreement from being valid or enforceable if it requires arbitration of an employment dispute, consumer dispute, antitrust dispute, or civil rights dispute.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Arbitration Fairness Act of 2018''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) The Federal Arbitration Act (now enacted as chapter 1 
        of title 9 of the United States Code) was intended to apply to 
        disputes between commercial entities of generally similar 
        sophistication and bargaining power.
            (2) A series of decisions by the Supreme Court of the 
        United States have interpreted the Act so that it now extends 
        to consumer disputes and employment disputes, contrary to the 
        intent of Congress.
            (3) Most consumers and employees have little or no 
        meaningful choice whether to submit their claims to 
        arbitration. Often, consumers and employees are not even aware 
        that they have given up their rights.
            (4) Mandatory arbitration undermines the development of 
        public law because there is inadequate transparency and 
        inadequate judicial review of arbitrators' decisions.
            (5) Arbitration can be an acceptable alternative when 
        consent to the arbitration is truly voluntary, and occurs after 
        the dispute arises.

SEC. 3. ARBITRATION OF EMPLOYMENT, CONSUMER, ANTITRUST, AND CIVIL 
              RIGHTS DISPUTES.

    (a) In General.--Title 9 of the United States Code is amended by 
adding at the end the following:

``CHAPTER 4--ARBITRATION OF EMPLOYMENT, CONSUMER, ANTITRUST, AND CIVIL 
                            RIGHTS DISPUTES

``Sec.
``401. Definitions.
``402. Validity and enforceability.
``Sec. 401. Definitions
    ``In this chapter--
            ``(1) the term `antitrust dispute' means a dispute--
                    ``(A) involving a claim for damages allegedly 
                caused by a violation of the antitrust laws (as defined 
                in subsection (a) of the first section of the Clayton 
                Act (15 U.S.C. 12)) or State antitrust laws; and
                    ``(B) in which the plaintiffs seek certification as 
                a class under rule 23 of the Federal Rules of Civil 
                Procedure or a comparable rule or provision of State 
                law;
            ``(2) the term `civil rights dispute' means a dispute--
                    ``(A) arising under--
                            ``(i) the Constitution of the United States 
                        or the constitution of a State; or
                            ``(ii) a Federal or State statute that 
                        prohibits discrimination on the basis of race, 
                        sex, disability, religion, national origin, or 
                        any invidious basis in education, employment, 
                        credit, housing, public accommodations and 
                        facilities, voting, or program funded or 
                        conducted by the Federal Government or State 
                        government, including any statute enforced by 
                        the Civil Rights Division of the Department of 
                        Justice and any statute enumerated in section 
                        62(e) of the Internal Revenue Code of 1986 
                        (relating to unlawful discrimination); and
                    ``(B) in which at least 1 party alleging a 
                violation of the Constitution of the United States, a 
                State constitution, or a statute prohibiting 
                discrimination is an individual;
            ``(3) the term `consumer dispute' means a dispute between 
        an individual who seeks or acquires real or personal property, 
        services, securities or other investments, money, or credit for 
        personal, family, or household purposes and the seller or 
        provider of such property, services, securities or other 
        investments, money, or credit;
            ``(4) the term `employment dispute' means a dispute between 
        an employer and employee arising out of the relationship of 
        employer and employee as defined in section 3 of the Fair Labor 
        Standards Act of 1938 (29 U.S.C. 203); and
            ``(5) the term `predispute arbitration agreement' means any 
        agreement to arbitrate a dispute that had not yet arisen at the 
        time of the making of the agreement.
``Sec. 402. Validity and enforceability
    ``(a) In General.--Notwithstanding any other provision of this 
title, no predispute arbitration agreement shall be valid or 
enforceable if it requires arbitration of an employment dispute, 
consumer dispute, antitrust dispute, or civil rights dispute.
    ``(b) Applicability.--
            ``(1) In general.--An issue as to whether this chapter 
        applies to an arbitration agreement shall be determined under 
        Federal law. The applicability of this chapter to an agreement 
        to arbitrate and the validity and enforceability of an 
        agreement to which this chapter applies shall be determined by 
        a court, 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.
            ``(2) Collective bargaining agreements.--Nothing in this 
        chapter shall apply to any arbitration provision in a contract 
        between an employer and a labor organization or between labor 
        organizations, except that no such arbitration provision shall 
        have the effect of waiving the right of an employee to seek 
        judicial enforcement of a right arising under a provision of 
        the Constitution of the United States, a State constitution, or 
        a Federal or State statute, or public policy arising 
        therefrom.''.
    (b) Technical and Conforming Amendments.--
            (1) In general.--Title 9 of the United States Code is 
        amended--
                    (A) in section 1, by striking ``of seamen,'' and 
                all that follows through ``interstate commerce'';
                    (B) in section 2, by inserting ``or as otherwise 
                provided in chapter 4'' before the period at the end;
                    (C) in section 208--
                            (i) in the section heading, by striking 
                        ``Chapter 1; residual application'' and 
                        inserting ``Application''; and
                            (ii) by adding at the end the following: 
                        ``This chapter applies to the extent that this 
                        chapter is not in conflict with chapter 4.''; 
                        and
                    (D) in section 307--
                            (i) in the section heading, by striking 
                        ``Chapter 1; residual application'' and 
                        inserting ``Application''; and
                            (ii) by adding at the end the following: 
                        ``This chapter applies to the extent that this 
                        chapter is not in conflict with chapter 4.''.
            (2) Table of sections.--
                    (A) Chapter 2.--The table of sections for chapter 2 
                of title 9, United States Code, is amended by striking 
                the item relating to section 208 and inserting the 
                following:

``208. Application.''.
                    (B) Chapter 3.--The table of sections for chapter 3 
                of title 9, United States Code, is amended by striking 
                the item relating to section 307 and inserting the 
                following:

``307. Application.''.
            (3) Table of chapters.--The table of chapters for title 9, 
        United States Code, is amended by adding at the end the 
        following:

``4.  Arbitration of employment, consumer, antitrust, and        401''.
                            civil rights disputes.

SEC. 4. EFFECTIVE DATE.

    This Act, and the amendments made by this Act, shall take effect on 
the date of enactment of this Act and shall apply with respect to any 
dispute or claim that arises on or after such date.