FAIR Act of 2025
The FAIR Act of 2025 would bar predispute arbitration agreements and predispute joint-action waivers in employment, consumer, antitrust, and civil rights disputes. It places these disputes outside the enforceability realm of arbitration by creating a new Chapter 5 in Title 9 of the U.S. Code. Under the bill, courts—not arbitrators—would determine whether the chapter applies, and any such agreements would be considered invalid and unenforceable. The act also preserves a narrow exception for voluntary arbitration that occurs after a dispute arises. It includes a labor-related carve-out for arbitration provisions between employers and unions, but clarifies that constitutional or statutory rights cannot be waived in that context. The measure takes effect on enactment and applies only to disputes arising after that date. In short, the bill seeks to promote court-based resolution of many disputes that might otherwise be forced into arbitration through predispute agreements, while allowing voluntary post-dispute arbitration to occur.
Key Points
- 1Prohibition of predispute arbitration agreements and predispute joint-action waivers in employment, consumer, antitrust, and civil rights disputes; such agreements and waivers would not be valid or enforceable.
- 2Creation of Chapter 5 in Title 9 (Arbitration of Employment, Consumer, Antitrust, and Civil Rights Disputes) with defined terms for antitrust, civil rights, consumer, and employment disputes, as well as for predispute arbitration agreements and predispute joint-action waivers.
- 3Court-based determinations: whether this chapter applies must be decided by a court (not an arbitrator), and disputes involving its applicability are not subject to arbitration for resolution.
- 4Labor exemption with caveats: arbitration provisions in contracts between an employer and a labor organization are exempt, but cannot waive rights protected by the Constitution or by federal/state statutes or public policy.
- 5Effective date and scope: the act takes effect upon enactment and applies to disputes arising on or after that date; it does not apply retroactively to pre-enactment disputes, and a post-dispute arbitration option remains permissible.