II 

113TH CONGRESS 

1ST SESSION S. 878 

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

IN THE SENATE OF THE UNITED STATES 

MAY 7, 2013 

Mr. FRANKEN (for himself, Mr. LEAHY, Ms. WARREN, Mr. BLUMENTHAL, Mr. 

WHITEHOUSE, Ms. HIRONO, Mr. SANDERS, Mr. UDALL of New Mexico, 

Mr. HARKIN, Mr. MENENDEZ, Mr. SCHATZ, Ms. HEITKAMP, Mr. BROWN, 

Mrs. BOXER, Mr. WYDEN, and Mr. LAUTENBERG) introduced the following bill; which was read twice and referred to the Committee on the 

Judiciary 

A BILL 

To amend title 9 of the 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 ‘‘Arbitration Fairness 

5 Act of 2013’’. 

6 SEC. 2. FINDINGS. 

7 The Congress finds the following: 

8 (1) The Federal Arbitration Act (now enacted 

9 as chapter 1 of title 9 of the United States Code) 


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1 was intended to apply to disputes between commer2 cial entities of generally similar sophistication and 

3 bargaining power. 

4 (2) A series of decisions by the Supreme Court 

5 of the United States have interpreted the Act so 

6 that it now extends to consumer disputes and em7 ployment disputes, contrary to the intent of Con8 gress. 

9 (3) Most consumers and employees have little 

10 or no meaningful choice whether to submit their 

11 claims to arbitration. Often, consumers and employ12 ees are not even aware that they have given up their 

13 rights. 

14 (4) Mandatory arbitration undermines the de15 velopment of public law because there is inadequate 

16 transparency and inadequate judicial review of arbi17 trators’ decisions. 

18 (5) Arbitration can be an acceptable alternative 

19 when consent to the arbitration is truly voluntary, 

20 and occurs after the dispute arises. 

21 SEC. 3. ARBITRATION OF EMPLOYMENT, CONSUMER, ANTI22 TRUST, AND CIVIL RIGHTS DISPUTES. 

23 (a) IN GENERAL.—Title 9 of the United States Code 

24 is amended by adding at the end the following: 


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1 ‘‘CHAPTER 4—ARBITRATION OF EMPLOY2 MENT, CONSUMER, ANTITRUST, AND 

3 CIVIL RIGHTS DISPUTES 

‘‘Sec. 

‘‘401. Definitions. 

‘‘402. Validity and enforceability. 

4 ‘‘§ 401. Definitions 

5 ‘‘In this chapter— 

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

8 ‘‘(A) involving a claim for damages alleg9 edly caused by a violation of the antitrust laws 

10 (as defined in subsection (a) of the first section 

11 of the Clayton Act (15 U.S.C. 12)) or State 

12 antitrust laws; and 

13 ‘‘(B) in which the plaintiffs seek certifi14 cation as a class under rule 23 of the Federal 

15 Rules of Civil Procedure or a comparable rule 

16 or provision of State law; 

17 ‘‘(2) the term ‘civil rights dispute’ means a dis18 pute— 

19 ‘‘(A) arising under— 

20 ‘‘(i) the Constitution of the United 

21 States or the constitution of a State; or 

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

23 prohibits discrimination on the basis of 

24 race, sex, disability, religion, national oriVerDate Mar 15 2010 02:54 May 08, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S878.IS S878

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1 gin, or any invidious basis in education, 

2 employment, credit, housing, public accom3 modations and facilities, voting, or pro4 gram funded or conducted by the Federal 

5 Government or State government, includ6 ing any statute enforced by the Civil 

7 Rights Division of the Department of Jus8 tice and any statute enumerated in section 

9 62(e) of the Internal Revenue Code of 

10 1986 (relating to unlawful discrimination); 

11 and 

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

13 violation of the Constitution of the United 

14 States, a State constitution, or a statute pro15 hibiting discrimination is an individual; 

16 ‘‘(3) the term ‘consumer dispute’ means a dis17 pute between an individual who seeks or acquires 

18 real or personal property, services (including services 

19 relating to securities and other investments), money, 

20 or credit for personal, family, or household purposes 

21 and the seller or provider of such property, services, 

22 money, or credit; 

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

24 dispute between an employer and employee arising 

25 out of the relationship of employer and employee as 


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1 defined in section 3 of the Fair Labor Standards 

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

3 ‘‘(5) the term ‘predispute arbitration agree4 ment’ means any agreement to arbitrate a dispute 

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

6 of the agreement. 

7 ‘‘§ 402. Validity and enforceability 

8 ‘‘(a) IN GENERAL.—Notwithstanding any other pro9 vision of this title, no predispute arbitration agreement 

10 shall be valid or enforceable if it requires arbitration of 

11 an employment dispute, consumer dispute, antitrust dis12 pute, or civil rights dispute. 

13 ‘‘(b) APPLICABILITY.— 

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

15 chapter applies to an arbitration agreement shall be 

16 determined under Federal law. The applicability of 

17 this chapter to an agreement to arbitrate and the 

18 validity and enforceability of an agreement to which 

19 this chapter applies shall be determined by a court, 

20 rather than an arbitrator, irrespective of whether the 

21 party resisting arbitration challenges the arbitration 

22 agreement specifically or in conjunction with other 

23 terms of the contract containing such agreement. 

24 ‘‘(2) COLLECTIVE BARGAINING AGREEMENTS.— 

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1 tion provision in a contract between an employer and 

2 a labor organization or between labor organizations, 

3 except that no such arbitration provision shall have 

4 the effect of waiving the right of an employee to 

5 seek judicial enforcement of a right arising under a 

6 provision of the Constitution of the United States, a 

7 State constitution, or a Federal or State statute, or 

8 public policy arising therefrom.’’. 

9 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 

10 (1) IN GENERAL.—Title 9 of the United States 

11 Code is amended— 

12 (A) in section 1, by striking ‘‘of seamen,’’ 

13 and all that follows through ‘‘interstate com14 merce’’; 

15 (B) in section 2, by inserting ‘‘or as other16 wise provided in chapter 4’’ before the period at 

17 the end; 

18 (C) in section 208— 

19 (i) in the section heading, by striking 

20 ‘‘Chapter 1; residual application’’ 

21 and inserting ‘‘Application’’; and 

22 (ii) by adding at the end the fol23 lowing: ‘‘This chapter applies to the extent 

24 that this chapter is not in conflict with 

25 chapter 4.’’; and 


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1 (D) in section 307— 

2 (i) in the section heading, by striking 

3 ‘‘Chapter 1; residual application’’ 

4 and inserting ‘‘Application’’; and 

5 (ii) by adding at the end the fol6 lowing: ‘‘This chapter applies to the extent 

7 that this chapter is not in conflict with 

8 chapter 4.’’. 

9 (2) TABLE OF SECTIONS.— 

10 (A) CHAPTER 2.—The table of sections for 

11 chapter 2 of title 9, United States Code, is 

12 amended by striking the item relating to section 

13 208 and inserting the following: 

‘‘208. Application.’’. 

14 (B) CHAPTER 3.—The table of sections for 

15 chapter 3 of title 9, United States Code, is 

16 amended by striking the item relating to section 

17 307 and inserting the following: 

‘‘307. Application.’’. 

18 (3) TABLE OF CHAPTERS.—The table of chap19 ters for title 9, United States Code, is amended by 

20 adding at the end the following: 

‘‘4. Arbitration of employment, consumer, antitrust, and civil rights disputes .............................................................................. 401’’. 


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1 SEC. 4. EFFECTIVE DATE. 

2 This Act, and the amendments made by this Act, 

3 shall take effect on the date of enactment of this Act and 

4 shall apply with respect to any dispute or claim that arises 

5 on or after such date. 

Æ 


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