Texas House Bill HB2375

Texas 2019 - 86th Regular

Caption

Relating to the enforcement of certain arbitration agreements.

Impact

By designating specific types of disputes as unenforceable under arbitration agreements, HB 2375 strengthens the legal protections available to employees and consumers. This bill is expected to shift the balance of power away from employers and service providers who might otherwise require arbitration as a contractual condition. Additionally, it provides a clearer framework for litigating claims that are vital to civil rights and anti-discrimination efforts, ensuring that individuals can seek judicial remedies for violations of their rights without being bound by arbitration agreements.

Summary

House Bill 2375 addresses the enforceability of certain arbitration agreements, thereby updating the legal landscape around arbitration in Texas. The bill specifies that agreements that would require arbitration for disputes which have not yet arisen—particularly in the context of employment, consumer transactions, civil rights, and antitrust claims—are unenforceable. This change aims to protect individuals from being compelled to arbitrate disputes against their will and ensure access to judicial recourse for cases involving fundamental rights under federal and state law.

Contention

The bill's implementation may lead to contention among business interests, particularly those that rely on arbitration as a means to resolve disputes efficiently. Proponents of HB 2375 assert that it fosters fairness and safeguards individuals against possible exploitation in arbitration scenarios that favor corporations. On the other hand, opponents may argue that it could lead to increased litigation costs and a backlog in the judicial system due to a potential rise in claims being pursued in court instead of through arbitration.