Consumer and Employment Arbitration – Six Things to Look for in 2018

Adjunct Professor George Friedman wrote a blog post about what to expect in consumer and employment arbitration in 2018.

1. President Trump StillLikes Arbitration

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Any anti-arbitration bills that somehow reach the President’s desk will almost invariably[3] be vetoed, and any Congressional Nullification Resolutions involving rollbacks of anti-arbitration regulations will be signed. Also look for more Executive Orders from Mr. Trump expanding use of arbitration by the federal government, and undoing any remaining anti-arbitration directives issued by his predecessor. And, we shouldn’t be surprised if the Department of Justice switches sides again in other court cases involving arbitration.

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2. All the Anti-Arbitration Legislation is Still(Mostly) Dead

For the most part, these Bills will continue to go nowhere; they are “mostly dead.”[4] Just as occurred in 2016… and 2015… and 2014. Why the “for the most part” qualification? In the wake of seemingly daily accusations of workplace sexual harassment, bipartisan Bills were introduced December 6^th in both Houses of Congress that would amend the Federal Arbitration Act to ban predispute arbitration agreements covering sexual discrimination disputes. Specifically, S. 2203 and H.R. 4570 — the Ending Forced Arbitration of Sexual Harassment Act — were introduced by Sen. Kirsten Gillibrand (D-NY) and Rep. Cheri Bustos (D-IL).

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3. SCOTUS’ Support for Arbitration Will StillContinue Unabated

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I predict a close decision from SCOTUS in Epic Systems reaffirming the preemptive effect of the FAA over other federal laws that do not expressly preclude arbitration, with Justice Gorsuch voting with the pro-arbitration camp. Mind you, I wouldn’t be completely shocked by a narrow 5-4 decision in the opposite direction. Further, I think Justice Gorsuch will reaffirm this year that he is indeed pro-arbitration.

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4. StillExpect Dodd-Frank to be Repealed and Replaced

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Sooner or later, Dodd-Frank will in word or deed be repealed and replaced this year with a statute along the lines of the Financial CHOICE Act. While the new law will incorporate some features of Dodd-Frank, the current law’s authority for SEC and CFPB to possibly develop regulations banning, limiting, or conditioning predispute arbitration clause use will not make the cut, in my view.

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5. Say Goodbye to the Department of Labor’s Fiduciary Rule

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The review ordered by the President almost a year ago will conclude that the DOL’s Fiduciary Standards Rule is confusing, costly, and duplicative. It will recommend the Rule be scrapped in favor of a unified Rule to be promulgated by the SEC.

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5. Say Goodbye to the Department of Labor’s Fiduciary Rule

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The review ordered by the President almost a year ago will conclude that the DOL’s Fiduciary Standards Rule is confusing, costly, and duplicative. It will recommend the Rule be scrapped in favor of a unified Rule to be promulgated by the SEC.

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6. The President Eventually Will Win the War over CFPB’s Leadership

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Sooner or letter, one way or the other, the President will prevail. Either he will win the legal challenges – which I predict he will – or he will simply nominate a new Director whom the Senate will confirm.

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