Congress takes a step closer to ending forced arbitration of age bias claims

Yesterday, the U.S. Senate Judiciary Committee announced that it had advanced the Protecting Older Americans Act, which would invalidate forced arbitration clauses requiring employees to arbitrate age discrimination claims, whether for disparate treatment, disparate impact, harassment, or retaliation.

15 Senators voted in favor and 6 against.

The legislation, introduced in both houses of Congress last June, had bipartisan support then and continues to appeal to members of Congress on both sides of the aisle.

However, Law360’s Grace Elletson reports that one of the six “nays,” Sen. John Cornyn, R-Texas, voted against the measure because he believes that arbitration is a cost-effective alternative to litigation.

Under the Protecting Older Americans Act, individuals who have signed arbitration agreements would have the option, but not the obligation, to arbitrate claims of age bias against employers.

Meanwhile, Sen. Cory Booker, D-N.J., who cosponsored the eponymous “Ending Forced Arbitration of Race Discrimination Act of 2023,” lamented that Congress should focus on a measure that would outlaw mandatory arbitration for other forms of discrimination.

The Committee cited an AARP survey finding that 78% of older workers have either seen or experienced age discrimination in the workplace. If the new law passes, a court, rather than an arbitrator, would decide whether a claim falls within its scope. And it would only apply to new claims. Anything pending in arbitration now can stay there.

My money is on the Protecting Older Americans Act making it to President Biden for his signature. Beyond the bipartisan support, one of the faces of the bill is Gretchen Carlson, the former Fox News personality who was a galvanizing force behind the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act of 2021, which President Biden signed into law in 2022. Victims of sexual harassment or sexual assault at work who previously signed arbitration agreements can arbitrate their claims but don’t have to.

Ms. Carlson also backed the Speak Out Act, which voids any nondisclosure and nondisparagement clauses found in pre-dispute contracts or agreements concerning conduct alleged to constitute sexual harassment or sexual assault. President Biden also signed that into law.

Whether it’s the “Carlson Effect” or something else, there is a clear trend toward eliminating arbitration of employment claims.

Those of you who have arbitration agreements with your employees should continue to track these legislative efforts closely and consider alternatives. For example, in many states, employers and employees can agree to litigate discrimination claims without a jury. Yes, those matters may attract the publicity that arbitration helps to avoid. But bench trials mitigate the risk of runaway juries.