An End to Forced Arbitration?

By Whitney Horak

Lawmakers recently introduced the “Forced Arbitration Injustice Repeal Act,” which seeks to put an end to forced or mandatory arbitration. The bill would prevent forced arbitration as a result of an agreement made before a dispute occurs and instead require that employees or consumers be permitted to choose arbitration at their will. If passed, the act would end mandatory pre-dispute arbitration agreements in employment disputes and consumer actions, including nursing home actions.

Arbitration agreements aren’t always “forced.”

Contrary to the implications of the term, not all pre-dispute arbitration agreements are “forced.” In the nursing home context, in most states, including Tennessee, arbitration cannot be a condition of admission, and it is therefore not mandatory. For this reason, the individual completing the admissions process may choose to agree to or decline the proposed arbitration agreement, which covers future claims.

Impact for nursing homes

While the nursing home arena is a major topic of discussion for the subject of pre-dispute arbitration agreements, the act would also extend to arbitration agreements which are conditions of employment. If the act were to pass, any states that currently permit mandatory arbitration as condition of a nursing home admission agreement would be deemed invalid, as the act would amend the FAA and preempt state law.  

Many individuals favor arbitration for its many positive benefits. For example, proceedings are kept confidential, which protects a person’s personal information from becoming part of a public record. Some people could find that this confidentiality is a persuasive factor in signing an arbitration agreement. Additionally, the costs of arbitration are lower, and the proceedings move forward more quickly than in the court system. If this act were to pass, the court system could become more backlogged than it currently is. In addition to the backlog in the court system, litigation costs - which already hamper the ability to run long-term care facilities - could increase. However, facilities with optional arbitration agreements in place would not be significantly affected.