Consumer and Employee Arbitration Bill of Rights

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Consumer and Employee Arbitration 
Bill of Rights''.

SEC. 2. ELECTION OF ARBITRATION.

    (a) Consumer and Employment Contracts.--Chapter 1 of title 9, 
United States Code, is amended by adding at the end the following:
``Sec. 17. Consumer and employment contracts
    ``(a) Definitions.--In this section--
            ``(1) the term `consumer contract' means any written, 
        standardized form contract between the parties to a consumer 
        transaction;
            ``(2) the term `consumer transaction' means the sale or 
        rental of goods, services, or real property, including an 
        extension of credit or the provision of any other financial 
        product or service, to an individual in a transaction entered 
        into primarily for personal, family, or household purposes; and
            ``(3) the term `employment contract'--
                    ``(A) means a uniform, employer promulgated plan 
                that covers all employees in a company, facility, or 
                work grade, and that may cover legally protected rights 
                or statutory rights; and
                    ``(B) does not include any individually negotiated 
                executive employment agreements.
    ``(b) Fair Disclosure.--In order to be binding on the parties to a 
consumer contract or an employment contract, an arbitration clause in 
such contract shall--
            ``(1) have a printed heading in bold, capital letters 
        entitled `arbitration clause', which heading shall be printed 
        in letters not smaller than \1/2\ inch in height;
            ``(2) explicitly state whether participation within the 
        arbitration program is mandatory or optional;
            ``(3) identify a source that a consumer can contact for 
        additional information on costs and fees and on all forms and 
        procedures necessary for effective participation in the 
        arbitration program; and
            ``(4) provide notice that all parties retain the right to 
        resolve a dispute in a small claims court, if such dispute 
        falls within the jurisdiction of that court and the claim is 
        for less than $50,000 in total damages.
    ``(c) Procedural Rights.--If a consumer contract or employment 
contract provides for the use of arbitration to resolve a dispute 
arising out of or relating to the contract, each party to the contract 
shall be afforded the following rights, in addition to any rights 
provided by the contract:
            ``(1) Competence and neutrality of arbitrator and 
        administrative process.--
                    ``(A) In general.--Each party to the dispute 
                (referred to in this section as a `party') shall be 
                entitled to a competent, neutral arbitrator and an 
                independent, neutral administration of the dispute.
                    ``(B) Arbitrator.--Each party shall have an equal 
                voice in the selection of the arbitrator, who--
                            ``(i) shall comply with the Code of Ethics 
                        for Arbitrators in Commercial Disputes of the 
                        American Arbitration Association and the State 
                        bar association of which the arbitrator is a 
                        member;
                            ``(ii) shall have no personal or financial 
                        interest in the results of the proceedings in 
                        which the arbitrator is appointed and shall 
                        have no relation to the underlying dispute or 
                        to the parties or their counsel that may create 
                        an appearance of bias; and
                            ``(iii) prior to accepting appointment, 
                        shall disclose all information that might be 
                        relevant to neutrality, including service as an 
                        arbitrator or mediator in any past or pending 
                        case involving any of the parties or their 
                        representatives, or that may prevent a prompt 
                        hearing.
                    ``(C) Administration.--The arbitration shall be 
                administered by an independent, neutral alternative 
                dispute resolution organization to ensure fairness and 
                neutrality and prevent ex parte communication between 
                parties and the arbitrator.
            ``(2) Applicable law.--In resolving a dispute, the 
        arbitrator--
                    ``(A) shall be governed by the same substantive law 
                that would apply under conflict of laws principles 
                applicable in a court of the forum in which the 
                consumer or employee resided at the time the contract 
                was entered into; and
                    ``(B) shall be empowered to grant whatever relief 
                would be available in court under law or equity.
            ``(3) Representation.--Each party shall have the right to 
        be represented by an attorney, or other representative as 
        permitted by State law, at the expense of that party.
            ``(4) Hearing.--
                    ``(A) In general.--Each party shall be entitled to 
                a fair arbitration hearing (referred to in this section 
                as a `hearing') with adequate notice and an opportunity 
                to be heard.
                    ``(B) Electronic or telephonic means.--Subject to 
                subparagraph (C), in order  to reduce cost, the 
arbitrator may hold a hearing by electronic or telephonic means or by a 
submission of documents.
                    ``(C) Face-to-face meeting.--Each party shall have 
                the right to require a face-to-face hearing, which 
                hearing shall be held at a location that is reasonably 
                convenient for the party who is the consumer or 
                employee, unless in the interest of fairness the 
                arbitrator determines otherwise, in which case the 
                arbitrator shall use the process described in section 
                1391 of title 28 to determine the venue for the 
                hearing.
            ``(5) Evidence.--With respect to any hearing--
                    ``(A) each party shall have the right to present 
                evidence at the hearing and, for this purpose, each 
                party shall grant access to all information reasonably 
                relevant to the dispute to the other parties, subject 
                to any applicable privilege or other limitation on 
                discovery under applicable State law;
                    ``(B) consistent with the expedited nature of 
                arbitration, relevant and necessary prehearing 
                depositions shall be available to each party at the 
                direction of the arbitrator; and
                    ``(C) the arbitrator shall--
                            ``(i) make reasonable efforts to maintain 
                        the privacy of the hearing to the extent 
                        permitted by applicable State law; and
                            ``(ii) consider appropriate claims of 
                        privilege and confidentiality in addressing 
                        evidentiary issues.
            ``(6) Cross examination.--Each party shall have the right 
        to cross examine witnesses presented by the other parties at a 
        hearing.
            ``(7) Record of proceeding.--Any party seeking a 
        stenographic record of a hearing shall make arrangements 
        directly with a stenographer and shall notify the other parties 
        of these arrangements not less than 3 days in advance of the 
        hearing. The requesting party or parties shall pay the costs of 
        obtaining the record. If the transcript is agreed by the 
        parties, or determined by the arbitrator to be the official 
        record of the proceeding, it shall be provided to the 
        arbitrator and made available to the other parties for 
        inspection, at a date, time, and place determined by the 
        arbitrator.
            ``(8) Timely resolution.--Upon submission of a complaint by 
        the claimant, the respondent shall have 30 days to file an 
        answer. Thereafter, the arbitrator shall direct each party to 
        file documents and to provide evidence in a timely manner so 
        that the hearing may be held not later than 90 days after the 
        filing of the answer. In extraordinary circumstances, the 
        arbitrator may grant a limited extension of these time limits 
        to a party, or the parties may agree to an extension. The 
        arbitrator shall file a decision with each party not later than 
        30 days after the hearing.
            ``(9) Written decision.--The arbitrator shall provide each 
        party with a written explanation of the factual and legal basis 
        for the decision. This written decision shall describe the 
        application of an identified contract term, statute, or legal 
        precedent. The decision of the arbitrator shall be final and 
        binding, subject only to the review provisions in subsection 
        (d).
            ``(10) Expenses.--The arbitrator or independent arbitration 
        administration organization, as applicable, shall have the 
        authority to--
                    ``(A) provide for reimbursement of arbitration fees 
                to the claimant, in whole or in part, as part of the 
                remedy in accordance with applicable law or in the 
                interests of justice; and
                    ``(B) waive, defer, or reduce any fee or charge due 
                from the claimant in the event of extreme hardship.
            ``(11) Small claims opt out.--Each party shall have the 
        right to opt out of binding arbitration and into the small 
        claims court for the forum, if such court has jurisdiction over 
        the claim. For purposes of this paragraph, no court with 
        jurisdiction to hear claims in excess of $50,000 shall be 
        considered to be a small claims court.
    ``(d) Denial of Rights.--
            ``(1) Denial of rights by party misconduct.--
                    ``(A) In general.--At any time during an 
                arbitration involving a consumer contract or employment 
                contract, any party may file a motion with the 
                arbitrator asserting that the other party has deprived 
                the movant of 1 or more rights granted by this section 
                and seeking relief.
                    ``(B) Award by arbitrator.--If the arbitrator 
                determines that the movant has been deprived of a right 
                granted by this section by the other party, the 
                arbitrator shall award the movant a monetary amount, 
                which shall not exceed the reasonable expenses incurred 
                by the movant in filing the motion, including 
                attorneys' fees, unless the arbitrator finds that--
                            ``(i) the motion was filed without the 
                        movant's first making a good faith effort to 
                        obtain discovery or the realization of another 
                        right granted by this section;
                            ``(ii) the opposing party's nondisclosure, 
                        failure to respond, response, or objection was 
                        substantially justified; or
                            ``(iii) the circumstances otherwise make an 
                        award of expenses unjust.
            ``(2) Denial of rights by arbitrator.--A losing party in an 
        arbitration may file a petition in the district court of the 
        United States in the forum in which the consumer or employee 
        resided at the time the contract was entered into to assert 
        that the arbitrator violated 1 or more of the rights granted to 
        the party by this section and to seek relief. In order to grant 
        the petition, the court must find clear and convincing evidence 
        that 1 or more actions or omissions of the arbitrator resulted 
        in a deprivation of a right of the petitioner under this 
        section that was not harmless. If such a finding is made, the 
        court shall order a rehearing before a new arbitrator selected 
        in the same manner as the original arbitrator as the exclusive 
        judicial remedy provided by this section.''.
    (b) Technical and Conforming Amendment.--The table of sections for 
chapter 1 of title 9, United States Code, is amended by adding at the 
end the following:

``17. Consumer and employment contracts.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to any consumer contract or employment contract entered into 
after the date that is 6 months after the date of enactment of this 
Act.

SEC. 3. LIMITATION ON CLAIMS.

    Except as otherwise expressly provided in this Act, nothing in this 
Act may be construed to be the basis for any claim in law or equity.

Summary: Entitles each party under arbitration to: (1) competence and neutrality of the arbitrator and the administrative process; (2) representation by an attorney and a fair arbitration hearing; (3) the right to present evidence, cross examine witnesses, and obtain a record of the proceedings; and (4) timely resolution, with a written explanation.