New Act Voids Mandatory Arbitration for Age Discrimination Claims (40+)

The Protecting Older Americans Act of 2025 is straightforward: it cancels pre-signed agreements that force employees into arbitration for age discrimination claims. Specifically, if you’re 40 or older and allege you’ve been discriminated against—whether it’s wrongful termination, harassment, or a biased company policy—your employer can no longer use a boilerplate contract clause to force you out of court. This applies to claims under Federal, Tribal, or State law, and it’s entirely up to the person alleging discrimination to choose whether to use this new rule.

The Fine Print: Court Access Restored

Think about those stacks of onboarding paperwork you sign when starting a new job. Often buried deep in there is a clause saying you agree to settle any future disputes with the company through private arbitration, giving up your right to sue in court. This bill essentially carves out age discrimination disputes from that requirement. For someone who believes they were laid off because their employer wanted to replace them with a cheaper, younger worker, this means they get their day in a public courtroom, not a private arbitration room.

Crucially, the bill ensures that if there’s any argument about whether this new law applies to a specific case, a Federal court—not the arbitrator—must make that decision (SEC. 2). This prevents employers from arguing in front of an arbitrator (who they likely pay) that the arbitration clause should still hold up. This provision is a strong safeguard, making sure the intent of the law isn't immediately undermined by procedural challenges.

Who Feels the Change?

For the busy professional—say, a 50-year-old marketing manager or a 45-year-old construction foreman—this is about maintaining leverage and access to justice. Without this law, if they felt they were passed over for promotion due to age, they would be funneled into a private system that often lacks the transparency and discovery rules of public court. Now, the option to pursue the claim publicly is restored. This also applies to collective actions, meaning groups of older workers can join forces in court without being blocked by individual arbitration agreements.

On the flip side, employers who relied heavily on mandatory arbitration to manage litigation costs and keep disputes private will need to adjust their contracts and risk management strategies. They will face the potential for more public, costly lawsuits and class actions when dealing with claims from employees 40 and over. However, the bill is clear: it only applies to claims that start after the law is enacted (SEC. 3). Any age discrimination disputes currently ongoing or that happened before the bill becomes law won't be affected by this change.