FAIR Act Ends Forced Arbitration for Workers and Consumers, Restoring Access to Courtrooms

The Forced Arbitration Injustice Repeal Act of 2025, or the FAIR Act, is a major reset button on how everyday disputes get handled. Simply put, this bill makes it illegal for companies to force you into private arbitration before a problem even happens if that problem involves your job, something you bought, a civil rights issue, or an antitrust claim. It targets the fine print in employment contracts and user agreements that you often have to sign just to get hired or use a service.

The core of the FAIR Act is Section 3, which amends federal law (Title 9 of the U.S. Code) to declare that any pre-dispute arbitration agreement or joint-action waiver is invalid and unenforceable for those four categories of disputes. This means that if you sign a job offer today, that contract can no longer prevent you from suing your employer in court for wage theft or discrimination that might happen next year. Crucially, the bill clarifies that if there is any question about whether this new rule applies, a judge—not the private arbitrator—must decide the matter.

The End of the Contractual Catch-22

For most people, the biggest impact is the return of choice. Think about the last time you started a new job or clicked ‘Accept’ on a software update. Hidden in that digital scroll or paperwork was likely a clause forcing you to give up your right to a jury trial and instead settle future disputes in private arbitration. The FAIR Act sweeps these clauses away for employment and consumer issues (Sec. 3). For example, if you’re a software developer who believes you were unfairly fired, or a construction worker who was denied overtime pay, you can now take your case directly to a public court. This is a game-changer because public courts offer transparency and a right to appeal that private arbitration often lacks.

Protecting the Power of the Team

Another major provision targets the “joint-action waiver,” which is the clause that prevents you from teaming up with others who have the same problem. The FAIR Act voids these waivers for future disputes (Sec. 2, Sec. 3). This is huge for class action lawsuits. Say a bank charges thousands of customers a hidden fee, or a major retailer discriminates against a large group of job applicants. Before the FAIR Act, the company could force each person into individual arbitration, making it too expensive and impractical to fight. Now, those individuals can join forces in a class action lawsuit, making it economically feasible to hold large entities accountable. This restored right to collective action applies across all four covered areas: employment, consumer, antitrust, and civil rights.

When the New Rules Kick In

This bill doesn’t wait around. Section 4 states that the entire Act becomes effective the day it is signed into law. Any dispute that starts or accrues on or after that date falls under the new rules. If you’re already locked in a dispute that started last month, the old rules still apply, but any new issue arising from that signing date forward is covered. It’s important to note what the bill doesn’t do: it doesn't ban arbitration entirely. If you and a company voluntarily agree to use arbitration after a dispute has already happened—say, you decide it’s faster and cheaper than court—the FAIR Act allows that (Sec. 5). The focus is strictly on stopping the mandatory, pre-dispute waivers that take away your rights before you even know you have a problem.