II 

115TH CONGRESS 

1ST SESSION S. 647 

To amend title 9, United States Code, with respect to arbitration. 

IN THE SENATE OF THE UNITED STATES 

MARCH 15, 2017 

Mr. BLUMENTHAL (for himself, Mr. BROWN, Mr. MARKEY, Mr. FRANKEN, 

Mrs. MURRAY, Mr. MERKLEY, and Mr. WHITEHOUSE) introduced the following bill; which was read twice and referred to the Committee on the 

Judiciary 

A BILL 

To amend title 9, United States Code, with respect to 

arbitration. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Mandatory Arbitration 

5 Transparency Act of 2017’’. 

6 SEC. 2. VALIDITY AND ENFORCEABILITY OF PREDISPUTE 

7 ARBITRATION AGREEMENTS CONTAINING 

8 CONFIDENTIALITY CLAUSES. 

9 (a) IN GENERAL.—Title 9, United States Code, is 

10 amended by adding at the end the following: 


asabaliauskas on DSK3SPTVN1PROD with BILLS
2 

•S 647 IS

1 ‘‘CHAPTER 4—PREDISPUTE ARBITRATION 

2 AGREEMENTS CONTAINING CON3 FIDENTIALITY CLAUSES 

‘‘401. Definitions. 

‘‘402. Validity and enforceability. 

4 ‘‘§ 401. Definitions 

5 ‘‘(a) In this chapter— 

6 ‘‘(1) the term ‘civil rights dispute’ means a dis7 pute— 

8 ‘‘(A) arising under— 

9 ‘‘(i) the Constitution of the United 

10 States or the constitution of a State; or 

11 ‘‘(ii) a Federal or State statute that 

12 prohibits discrimination on the basis of 

13 race, sex, disability, religion, national ori14 gin, or any invidious basis in education, 

15 employment, credit, housing, public accom16 modations and facilities, voting, or any 

17 program funded or conducted by the Fed18 eral Government or a State government, 

19 including any statute enforced by the Civil 

20 Rights Division of the Department of Jus21 tice and any statute enumerated in section 

22 62(e) of the Internal Revenue Code of 

23 1986 (relating to unlawful discrimination); 

24 and 


asabaliauskas on DSK3SPTVN1PROD with BILLS
3 

•S 647 IS

1 ‘‘(B) in which at least 1 party alleging a 

2 violation of the Constitution of the United 

3 States, a State constitution, or a statute pro4 hibiting discrimination is an individual; 

5 ‘‘(2) the term ‘consumer dispute’ means a dis6 pute between an individual who seeks or acquires 

7 real or personal property, services, securities or 

8 other investments, money, or credit for personal, 

9 family, or household purposes and the seller or pro10 vider of such property, services, securities or other 

11 investments, money, or credit; 

12 ‘‘(3) the term ‘covered confidentiality clause’ 

13 means a provision of a predispute arbitration agree14 ment that, with respect to an employment dispute, 

15 consumer dispute, or civil rights dispute, purports 

16 to, or could be interpreted by a reasonable person to, 

17 prohibit a party to the dispute from— 

18 ‘‘(A) making a communication in a manner 

19 such that the prohibition would violate a State 

20 or Federal whistleblower statute; or 

21 ‘‘(B) reporting or making a communica22 tion, including to any relevant public official, 

23 elected official, or other State or Federal au24 thority, about— 

25 ‘‘(i) tortious conduct; 


asabaliauskas on DSK3SPTVN1PROD with BILLS
4 

•S 647 IS

1 ‘‘(ii) otherwise unlawful conduct; or 

2 ‘‘(iii) issues of public policy or public 

3 concern; 

4 ‘‘(4) the term ‘employment dispute’ means a 

5 dispute between an employer and employee arising 

6 out of the relationship of employer and employee as 

7 defined in section 3 of the Fair Labor Standards 

8 Act of 1938 (29 U.S.C. 203); and 

9 ‘‘(5) the term ‘predispute arbitration agree10 ment’ means any agreement to arbitrate a dispute 

11 that had not yet arisen at the time of the making 

12 of the agreement. 

13 ‘‘§ 402. Validity and enforceability 

14 ‘‘(a) IN GENERAL.— 

15 ‘‘(1) PROHIBITION ON PREDISPUTE ARBITRA16 TION AGREEMENTS WITH CONFIDENTIALITY

17 CLAUSES.—Notwithstanding any other provision of 

18 this title, no predispute arbitration agreement shall 

19 be valid or enforceable if the agreement contains a 

20 covered confidentiality clause. 

21 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

22 apply to a predispute arbitration agreement if a 

23 party to the agreement can demonstrate a confiden24 tiality interest that significantly outweighs the pri25 vate and public interest in disclosure. 


asabaliauskas on DSK3SPTVN1PROD with BILLS
5 

•S 647 IS

1 ‘‘(b) APPLICABILITY.— 

2 ‘‘(1) IN GENERAL.—An issue as to whether this 

3 chapter applies to an arbitration agreement shall be 

4 determined under Federal law. The applicability of 

5 this chapter to an agreement to arbitrate and the 

6 validity and enforceability of an agreement to which 

7 this chapter applies shall be determined by a court, 

8 rather than an arbitrator, irrespective of whether the 

9 party resisting arbitration challenges the arbitration 

10 agreement specifically or in conjunction with other 

11 terms of the contract containing such agreement. 

12 ‘‘(2) COLLECTIVE BARGAINING AGREEMENTS.— 

13 Nothing in this chapter shall apply to any arbitra14 tion provision in a contract between an employer and 

15 a labor organization or between labor organizations, 

16 except that no such arbitration provision shall have 

17 the effect of waiving the right of an employee to 

18 seek judicial enforcement of a right arising under a 

19 provision of the Constitution of the United States, a 

20 State constitution, or a Federal or State statute, or 

21 public policy arising therefrom.’’. 

22 (b) TECHNICAL AND CONFORMING AMENDMENT.— 

23 The table of chapters for title 9, United States Code, is 

24 amended by adding at the end the following: 

‘‘4. Predispute arbitration agreements containing confidentiality clauses ................................................ 401’’. 


asabaliauskas on DSK3SPTVN1PROD with BILLS
6 

•S 647 IS

1 SEC. 3. UNFAIR OR DECEPTIVE ACT OR PRACTICE. 

2 (a) DEFINITION.—In this section— 

3 (1) the term ‘‘Commission’’ means the Federal 

4 Trade Commission; and 

5 (2) the terms ‘‘covered confidentiality clause’’ 

6 and ‘‘predispute arbitration agreement’’ have the 

7 meanings given those terms in section 401 of title 9, 

8 United States Code, as added by section 2. 

9 (b) PROHIBITION.— 

10 (1) IN GENERAL.—It shall be unlawful for a 

11 person to knowingly offer to another person for rati12 fication a predispute arbitration agreement that con13 tains a covered confidentiality clause. 

14 (2) EXCEPTIONS.— 

15 (A) CONFIDENTIALITY INTEREST.—Para16 graph (1) shall not apply to a person that offers 

17 a predispute arbitration agreement with a cov18 ered confidentiality clause if the person can 

19 demonstrate a confidentiality interest that sig20 nificantly outweighs the private and public in21 terest in disclosure. 

22 (B) COLLECTIVE BARGAINING AGREE23 MENTS.—Paragraph (1) shall not apply with re24 spect to any arbitration provision in a contract 

25 between an employer and a labor organization 

26 or between labor organizations, if the arbitraVerDate Sep 11 2014 19:52 Mar 20, 2017 Jkt 069200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S647.IS S647

asabaliauskas on DSK3SPTVN1PROD with BILLS
7 

•S 647 IS

1 tion provision does not waive the right of an 

2 employee to seek judicial enforcement of a right 

3 arising under a provision of the Constitution of 

4 the United States, a State constitution, or a 

5 Federal or State statute, or public policy aris6 ing therefrom. 

7 (c) ENFORCEMENT BY FEDERAL TRADE COMMIS8 SION.— 

9 (1) TREATMENT AS UNFAIR OR DECEPTIVE ACT

10 OR PRACTICE.—A violation of subsection (b) by a 

11 person with respect to which the Commission is em12 powered under section 5(a)(2) of the Federal Trade 

13 Commission Act (15 U.S.C. 45(a)(2)) shall be treat14 ed as a violation of a rule defining an unfair or de15 ceptive act or practice prescribed under section 

16 18(a)(1)(B) of that Act (15 U.S.C. 57a(a)(1)(B)). 

17 (2) POWERS OF COMMISSION.— 

18 (A) IN GENERAL.—The Commission shall 

19 enforce this section in the same manner, by the 

20 same means, and with the same jurisdiction, 

21 powers, and duties as though all applicable 

22 terms and provisions of the Federal Trade 

23 Commission Act (15 U.S.C. 41 et seq.) were in24 corporated into and made a part of this section. 


asabaliauskas on DSK3SPTVN1PROD with BILLS
8 

•S 647 IS

1 (B) PRIVILEGES AND IMMUNITIES.—Any 

2 person who violates subsection (b) shall be sub3 ject to the penalties and entitled to the privi4 leges and immunities provided in the Federal 

5 Trade Commission Act (15 U.S.C. 41 et seq.). 

6 (3) RULEMAKING.—The Commission shall pro7 mulgate standards and rules to carry out this sec8 tion in accordance with section 553 of title 5, United 

9 States Code. 

10 (d) CIVIL ACTION.— 

11 (1) PRIVATE RIGHT OF ACTION.—Any person 

12 aggrieved by a violation of subsection (b) may bring 

13 a civil action in an appropriate district court of the 

14 United States. 

15 (2) REMEDIES.—In an action under paragraph 

16 (1), the court may award— 

17 (A) actual damages, but not less than liq18 uidated damages in an amount equal to $1,000; 

19 (B) punitive damages; 

20 (C) reasonable attorney’s fees and other 

21 litigation costs reasonably incurred; and 

22 (D) any other preliminary and equitable 

23 relief that the court determines appropriate, in24 cluding injunctive relief. 


asabaliauskas on DSK3SPTVN1PROD with BILLS
9 

•S 647 IS

1 SEC. 4. EFFECTIVE DATE. 

2 (a) IN GENERAL.—This Act, and the amendments 

3 made by this Act, shall take effect on the date of enact4 ment of this Act. 

5 (b) APPLICABILITY.— 

6 (1) VALIDITY AND ENFORCEABILITY.—Chapter 

7 4 of title 9, United States Code, as added by section 

8 2, shall apply with respect to any dispute or claim 

9 that arises on or after the date of enactment of this 

10 Act. 

11 (2) UNFAIR OR DECEPTIVE ACT OR PRAC12 TICE.—Section 3 shall apply with respect to any 

13 predispute arbitration agreement offered for ratifica14 tion on or after the date of enactment of this Act. 

Æ 


asabaliauskas on DSK3SPTVN1PROD with BILLS