The United States Senate Judiciary Committee, with bipartisan support, has advanced the Protecting Older Americans Act Bill. The bill, which was introduced by Kirsten Gillibrand, D-N.Y., and Lindsey Graham, R-S.C., heads to the full United States Senate. If enacted, this legislation would invalidate mandatory arbitration clauses in cases where an older employee asserts age discrimination claims against employers. If enacted, the proposed legislation covers both individual and class action age discrimination claims. The language of the proposed bill would cover both state and federal age discrimination claims. Older employees in New Jersey, New York, and Pennsylvania enjoy protections under both federal and state laws.

It is unclear at this point whether or not the bill will eventually become law. Several Senators have expressed reservations about the bill, calling it a “slippery slope” towards the end of mandatory arbitration clauses in other federal and state anti-discrimination laws. Assuming the Senate passes the bill, the United States House of Representatives would also need to approve it before it goes to the President who may veto it.

Employers often prefer to adjudicate these disputes in arbitration because arbitrators may be less likely than a jury to rule in favor of an employee asserting these claims. Likewise, employers often prefer mandatory arbitration clauses because arbitrators generally give employees smaller verdicts than juries. Although the American Arbitration Act requires the employer to bear the costs associated with the arbitrators, employers generally prefer arbitration in these matters because there is less discovery, more privacy and confidentiality, and less time for adjudication than in traditional court.

Stark & Stark will continue to monitor this important bill.

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