[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 647 Introduced in Senate (IS)]
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115th CONGRESS
1st Session
S. 647
To amend title 9, United States Code, with respect to arbitration.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 15, 2017
Mr. Blumenthal (for himself, Mr. Brown, Mr. Markey, Mr. Franken, Mrs.
Murray, Mr. Merkley, and Mr. Whitehouse) introduced the following bill;
which was read twice and referred to the Committee on the Judiciary
_______________________________________________________________________
A BILL
To amend title 9, United States Code, with respect to arbitration.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Mandatory Arbitration Transparency
Act of 2017''.
SEC. 2. VALIDITY AND ENFORCEABILITY OF PREDISPUTE ARBITRATION
AGREEMENTS CONTAINING CONFIDENTIALITY CLAUSES.
(a) In General.--Title 9, United States Code, is amended by adding
at the end the following:
``CHAPTER 4--PREDISPUTE ARBITRATION AGREEMENTS CONTAINING
CONFIDENTIALITY CLAUSES
``401. Definitions.
``402. Validity and enforceability.
``Sec. 401. Definitions
``(a) In this chapter--
``(1) the term `civil rights dispute' means a dispute--
``(A) arising under--
``(i) the Constitution of the United States
or the constitution of a State; or
``(ii) a Federal or State statute that
prohibits discrimination on the basis of race,
sex, disability, religion, national origin, or
any invidious basis in education, employment,
credit, housing, public accommodations and
facilities, voting, or any program funded or
conducted by the Federal Government or a State
government, including any statute enforced by
the Civil Rights Division of the Department of
Justice and any statute enumerated in section
62(e) of the Internal Revenue Code of 1986
(relating to unlawful discrimination); and
``(B) in which at least 1 party alleging a
violation of the Constitution of the United States, a
State constitution, or a statute prohibiting
discrimination is an individual;
``(2) the term `consumer dispute' means a dispute between
an individual who seeks or acquires real or personal property,
services, securities or other investments, money, or credit for
personal, family, or household purposes and the seller or
provider of such property, services, securities or other
investments, money, or credit;
``(3) the term `covered confidentiality clause' means a
provision of a predispute arbitration agreement that, with
respect to an employment dispute, consumer dispute, or civil
rights dispute, purports to, or could be interpreted by a
reasonable person to, prohibit a party to the dispute from--
``(A) making a communication in a manner such that
the prohibition would violate a State or Federal
whistleblower statute; or
``(B) reporting or making a communication,
including to any relevant public official, elected
official, or other State or Federal authority, about--
``(i) tortious conduct;
``(ii) otherwise unlawful conduct; or
``(iii) issues of public policy or public
concern;
``(4) the term `employment dispute' means a dispute between
an employer and employee arising out of the relationship of
employer and employee as defined in section 3 of the Fair Labor
Standards Act of 1938 (29 U.S.C. 203); and
``(5) the term `predispute arbitration agreement' means any
agreement to arbitrate a dispute that had not yet arisen at the
time of the making of the agreement.
``Sec. 402. Validity and enforceability
``(a) In General.--
``(1) Prohibition on predispute arbitration agreements with
confidentiality clauses.--Notwithstanding any other provision
of this title, no predispute arbitration agreement shall be
valid or enforceable if the agreement contains a covered
confidentiality clause.
``(2) Exception.--Paragraph (1) shall not apply to a
predispute arbitration agreement if a party to the agreement
can demonstrate a confidentiality interest that significantly
outweighs the private and public interest in disclosure.
``(b) Applicability.--
``(1) In general.--An issue as to whether this chapter
applies to an arbitration agreement shall be determined under
Federal law. The applicability of this chapter to an agreement
to arbitrate and the validity and enforceability of an
agreement to which this chapter applies shall be determined by
a court, rather than an arbitrator, irrespective of whether the
party resisting arbitration challenges the arbitration
agreement specifically or in conjunction with other terms of
the contract containing such agreement.
``(2) Collective bargaining agreements.--Nothing in this
chapter shall apply to any arbitration provision in a contract
between an employer and a labor organization or between labor
organizations, except that no such arbitration provision shall
have the effect of waiving the right of an employee to seek
judicial enforcement of a right arising under a provision of
the Constitution of the United States, a State constitution, or
a Federal or State statute, or public policy arising
therefrom.''.
(b) Technical and Conforming Amendment.--The table of chapters for
title 9, United States Code, is amended by adding at the end the
following:
``4. Predispute arbitration agreements containing 401''.
confidentiality clauses.
SEC. 3. UNFAIR OR DECEPTIVE ACT OR PRACTICE.
(a) Definition.--In this section--
(1) the term ``Commission'' means the Federal Trade
Commission; and
(2) the terms ``covered confidentiality clause'' and
``predispute arbitration agreement'' have the meanings given
those terms in section 401 of title 9, United States Code, as
added by section 2.
(b) Prohibition.--
(1) In general.--It shall be unlawful for a person to
knowingly offer to another person for ratification a predispute
arbitration agreement that contains a covered confidentiality
clause.
(2) Exceptions.--
(A) Confidentiality interest.--Paragraph (1) shall
not apply to a person that offers a predispute
arbitration agreement with a covered confidentiality
clause if the person can demonstrate a confidentiality
interest that significantly outweighs the private and
public interest in disclosure.
(B) Collective bargaining agreements.--Paragraph
(1) shall not apply with respect to any arbitration
provision in a contract between an employer and a labor
organization or between labor organizations, if the
arbitration provision does not waive the right of an
employee to seek judicial enforcement of a right
arising under a provision of the Constitution of the
United States, a State constitution, or a Federal or
State statute, or public policy arising therefrom.
(c) Enforcement by Federal Trade Commission.--
(1) Treatment as unfair or deceptive act or practice.--A
violation of subsection (b) by a person with respect to which
the Commission is empowered under section 5(a)(2) of the
Federal Trade Commission Act (15 U.S.C. 45(a)(2)) shall be
treated as a violation of a rule defining an unfair or
deceptive act or practice prescribed under section 18(a)(1)(B)
of that Act (15 U.S.C. 57a(a)(1)(B)).
(2) Powers of commission.--
(A) In general.--The Commission shall enforce this
section in the same manner, by the same means, and with
the same jurisdiction, powers, and duties as though all
applicable terms and provisions of the Federal Trade
Commission Act (15 U.S.C. 41 et seq.) were incorporated
into and made a part of this section.
(B) Privileges and immunities.--Any person who
violates subsection (b) shall be subject to the
penalties and entitled to the privileges and immunities
provided in the Federal Trade Commission Act (15 U.S.C.
41 et seq.).
(3) Rulemaking.--The Commission shall promulgate standards
and rules to carry out this section in accordance with section
553 of title 5, United States Code.
(d) Civil Action.--
(1) Private right of action.--Any person aggrieved by a
violation of subsection (b) may bring a civil action in an
appropriate district court of the United States.
(2) Remedies.--In an action under paragraph (1), the court
may award--
(A) actual damages, but not less than liquidated
damages in an amount equal to $1,000;
(B) punitive damages;
(C) reasonable attorney's fees and other litigation
costs reasonably incurred; and
(D) any other preliminary and equitable relief that
the court determines appropriate, including injunctive
relief.
SEC. 4. EFFECTIVE DATE.
(a) In General.--This Act, and the amendments made by this Act,
shall take effect on the date of enactment of this Act.
(b) Applicability.--
(1) Validity and enforceability.--Chapter 4 of title 9,
United States Code, as added by section 2, shall apply with
respect to any dispute or claim that arises on or after the
date of enactment of this Act.
(2) Unfair or deceptive act or practice.--Section 3 shall
apply with respect to any predispute arbitration agreement
offered for ratification on or after the date of enactment of
this Act.
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