Business Conflict Blog by Peter Phillips
Larson Frisby, of the ABA Governmental Affairs Office, recently offered an update on the status of federal ADR legislation and other related measures. Some of the most interesting proposals are briefly described below.
The Dodd-Frank Act required the Consumer Financial Protection Bureau to conduct a study on pre-dispute arbitration agreements. That study issued on March 10, 2015. It was highly critical of both consumer mandatory arbitration and consumer class action waivers. It seems likely that the CFPB will issue regulations limiting or even prohibiting such clauses to resolve consumer financial disputes. (Of course, whether making the courts the sole avenue of redress for consumers is an improvement is another question.)
The Arbitration Fairness Act continues its (by now) perennial appearance and seems destined to another perennial defeat. The Act would ban all mandatory pre-dispute arbitration “agreements” for employment, consumer, antitrust and civil rights disputes. The current version does not ban pre-dispute arbitration clauses in franchise agreements. The bill is in committee and not expected to be acted upon.
Mandatory arbitration of securities disputes are sought to be banned by a third bill, which — lacking any Republican support — is unlikely to advance.
The same fate is shared by a bill seeking to prohibit employers from requiring their employees to arbitrate rape claims. Notably, this bill excludes from its coverage employees who are elected to public office, as well as their personal staff and immediate advisors.
The Court Legal Access and Student Support (CLASS) Act would invalidate all mandatory pre-dispute agreements to arbitrate enrollment disputes between a student and a college. It too has been referred to committee and no further action has been taken.
A proposal to restructure the Surface Transportation Board, by contrast, is likely to be enacted. And it proposes the establishment of a voluntary and binding arbitration process to resolve rail rate and practice disputes, once those claims have been filed with the Board.
Legislation seeking to improve the process involved in FOIA requests contains a provision that would require the Office of Government Information Services to offer mediation services to resolve disputes between FOIA requesters and administrative agencies. The bill enjoys strong bipartisan support in both houses and is likely to pass.
Several measures address the establishment or reform of ombuds positions in certain federal agencies. They include ombuds functions involving long-term care disputes, Medicare and Medicaid, small business procurement, the Federal Air Marshall Service, and the Transportation Security Administration.
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