Mandatory Arbitration Transparency Act of 2017

To amend title 9, United States Code, with respect to arbitration. 1. Short title This Act may be cited as the Mandatory Arbitration Transparency Act of 2017 2. Validity and enforceability of predispute arbitration agreements containing confidentiality clauses (a) In general Title 9, United States Code, is amended by adding at the end the following: 4 Predispute arbitration agreements containing confidentiality clauses 401. Definitions. 402. Validity and enforceability. 401. Definitions (a) In this chapter— (1) the term civil rights 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 any program funded or conducted by the Federal Government or a State government, including any statute enforced by the Civil Rights Division of the Department of Justice and any statute enumerated in section 62(e) (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; (2) the term consumer dispute (3) the term covered confidentiality clause (A) making a communication in a manner such that the prohibition would violate a State or Federal whistleblower statute; or (B) reporting or making a communication, including to any relevant public official, elected official, or other State or Federal authority, about— (i) tortious conduct; (ii) otherwise unlawful conduct; or (iii) issues of public policy or public concern; (4) the term employment dispute 29 U.S.C. 203 (5) the term predispute arbitration agreement 402. Validity and enforceability (a) In general (1) Prohibition on predispute arbitration agreements with confidentiality clauses Notwithstanding any other provision of this title, no predispute arbitration agreement shall be valid or enforceable if the agreement contains a covered confidentiality clause. (2) Exception Paragraph (1) shall not apply to a predispute arbitration agreement if a party to the agreement can demonstrate a confidentiality interest that significantly outweighs the private and public interest in disclosure. (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 amendment The table of chapters for title 9, United States Code, is amended by adding at the end the following: 4. Predispute arbitration agreements containing confidentiality clauses 401 . 3. Unfair or deceptive act or practice (a) Definition In this section— (1) the term Commission (2) the terms covered confidentiality clause predispute arbitration agreement (b) Prohibition (1) In general It shall be unlawful for a person to knowingly offer to another person for ratification a predispute arbitration agreement that contains a covered confidentiality clause. (2) Exceptions (A) Confidentiality interest Paragraph (1) shall not apply to a person that offers a predispute arbitration agreement with a covered confidentiality clause if the person can demonstrate a confidentiality interest that significantly outweighs the private and public interest in disclosure. (B) Collective bargaining agreements Paragraph (1) shall not apply with respect to any arbitration provision in a contract between an employer and a labor organization or between labor organizations, if the arbitration provision does not waive 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. (c) Enforcement by Federal Trade Commission (1) Treatment as unfair or deceptive act or practice A violation of subsection (b) by a person with respect to which the Commission is empowered under section 5(a)(2) of the Federal Trade Commission Act ( 15 U.S.C. 45(a)(2) 15 U.S.C. 57a(a)(1)(B) (2) Powers of Commission (A) In general The Commission shall enforce this section in the same manner, by the same means, and with the same jurisdiction, powers, and duties as though all applicable terms and provisions of the Federal Trade Commission Act ( 15 U.S.C. 41 (B) Privileges and immunities Any person who violates subsection (b) shall be subject to the penalties and entitled to the privileges and immunities provided in the Federal Trade Commission Act ( 15 U.S.C. 41 (3) Rulemaking The Commission shall promulgate standards and rules to carry out this section in accordance with section 553 of title 5, United States Code. (d) Civil action (1) Private right of action Any person aggrieved by a violation of subsection (b) may bring a civil action in an appropriate district court of the United States. (2) Remedies In an action under paragraph (1), the court may award— (A) actual damages, but not less than liquidated damages in an amount equal to $1,000; (B) punitive damages; (C) reasonable attorney's fees and other litigation costs reasonably incurred; and (D) any other preliminary and equitable relief that the court determines appropriate, including injunctive relief. 4. Effective date (a) In general This Act, and the amendments made by this Act, shall take effect on the date of enactment of this Act. (b) Applicability (1) Validity and enforceability Chapter 4 (2) Unfair or deceptive act or practice Section 3 shall apply with respect to any predispute arbitration agreement offered for ratification on or after the date of enactment of this Act.

Summary: Mandatory Arbitration Transparency Act of 2017 This bill prohibits predispute arbitration agreements from containing a confidentiality clause regarding an employment, consumer, or civil rights dispute that could be interpreted to prohibit a party from: (1) making a communication in a manner such that the prohibition would violate a whistle-blower statute; or (2) reporting or making a communication about tortious conduct, unlawful conduct, or issues of public policy or public concern. But the prohibition shall not apply if a party can demonstrate a confidentiality interest that significantly outweighs the private and public interest in disclosure. The validity or enforceability of such an agreement to arbitrate shall be determined by a court, under federal law, rather than by 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. The bill does not apply to contracts between an employer and a labor organization or between labor organizations, except that no such arbitration provision shall waive the right of an employee to seek judicial enforcement of a right arising under the U.S. Constitution, a state constitution, a federal or state statute, or related public policy. The Federal Trade Commission shall enforce against violations by persons offering such agreements, which shall be treated as unfair or deceptive acts or practices under Federal Trade Commission Act. The bill also allows private rights of action by any persons aggrieved by a violation.