Arbitration Fairness Act is a Trio, Not a Duo

A reader of my post last week, Arbitration Fairness Act - A Fatal Linkage for Employers, would be forgiven for not understanding that there is a third interest group other than employment and consumer transactions in which arbitration would be banned if the bill passes.

That ban would be for pre-dispute arbitration in franchise agreements. And as you might guess, there are differences of opinion in that industry as well, see Franchisors, Franchisees at Odds Over Arbitration Fairness Act, a story at a franchising specific blog, blue maumau.

According to the author, Lionel Hutz:

The International Franchise Association opposes this bill. Franchisee groups such as the American Association of Franchisees and Dealers, the Coalition of Franchisee Associations and Dunkin’ Donuts Independent Franchise Owners supports it.

The franchise part of the bill may impact the fewest people of the three areas in which pre-dispute arbitration agreements would be banned, but it may also be the group where feelings are the deepest.

My guess is that employers who want to keep the ability to mandate agreement to arbitration for disputes as a condition of employment, ought to distance themselves from that aspect of the bill as well and should push for separate treatment. Even then, it will be an uphill fight.