S-3243-119
Read twice and referred to the Committee on the Judiciary.
Sponsored by Cory Booker (D-NJ)
What it does
This bill would amend the Federal Arbitration Act so that, at the election of a person alleging race, color, or national origin discrimination (including harassment or retaliation), or of the named representative in a class or collective action, a predispute arbitration agreement or predispute joint-action waiver would not be valid or enforceable for a related case under federal, Tribal, state, or local law. A court, not an arbitrator, would decide whether the chapter applies, even if the contract says otherwise. It would apply only to disputes that arise or accrue on or after the date of enactment.
Who benefits
Employees, job applicants, tenants, borrowers, and consumers who allege race, color, or national origin discrimination and who signed arbitration agreements before a dispute arose, since they could choose court instead. Class and collective-action plaintiffs who could pursue group claims despite class waivers. Civil rights litigators and advocacy groups that rely on public court filings to show patterns of discrimination. Other people affected by the same practices, who could gain from public rulings and precedent.
Who is hurt
Employers, landlords, lenders, and companies that use mandatory arbitration and may face more litigation costs, discovery, and jury trials. Businesses that adopted arbitration programs to resolve disputes privately and quickly, who would lose that option for these claims if the claimant elects court. Arbitration providers that may see fewer cases. Defendants facing meritless claims, who may bear higher defense costs. Court systems that may see heavier dockets.
Supporters argue
Supporters argue that forced arbitration hides discrimination from public view, limits discovery, and bars class actions, so patterns of race discrimination go unchallenged. They contend the bill follows the 2022 law covering sexual assault and sexual harassment claims, and that it preserves choice because only the claimant may elect to void the agreement, keeping arbitration available to those who want it.
Opponents argue
Opponents argue that arbitration is usually faster and cheaper than court, and that voiding agreements at the claimant's sole option makes contracts one-sided and may raise litigation costs for employers. They contend the bill undercuts the Federal Arbitration Act's policy of enforcing agreements as written, and that carving out claim by claim creates uncertainty about which disputes arbitration clauses cover.
Constitutional context
Congress's power over arbitration rests on the Commerce Clause, which Allied-Bruce Terminix v. Dobson (1995) read the Federal Arbitration Act to reach fully. Courts enforce arbitration and class waivers as written unless Congress clearly says otherwise (AT&T Mobility v. Concepcion (2011); Epic Systems v. Lewis (2018)), and this bill is an explicit statutory override.
Checks and balances
Congress would narrow the Federal Arbitration Act's reach, and federal and state courts would gain authority to decide applicability instead of arbitrators; the claimant's election and judicial review serve as checks, and Congress could later amend the law.
Historical precedent
The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021 (enacted 2022) similarly exempted those claims from predispute arbitration at the claimant's election.