Model Legislation
Arbitration transparency standards — ready for introduction at the federal and state level
A project of Make Sure It Happens Inc. — Open Arbitration
Most American contracts — phone plans, credit cards, employment agreements — include a clause that routes disputes to private arbitration instead of court. That's legal and often efficient. The problem is that the system runs almost entirely in the dark: no standardized disclosure requirements, no public outcome data, no meaningful appellate review. That information gap undermines the FAA's original intent: efficient, neutral resolution of disputes between informed parties.
Congress has demonstrated bipartisan capacity for targeted arbitration reform. In 2022, the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (335–97 in the House, voice vote in the Senate) and the Speak Out Act (315–109 in the House, unanimous in the Senate) were both signed into law. Open Arbitration has drafted model legislation that extends the disclosure and transparency principles of those reforms to the broader arbitration market — designed to be introduced as written, adapted for specific jurisdictions, or enacted in standalone components.
Consumer Arbitration Fairness and Transparency Act
Comprehensive reform of consumer arbitration at the federal level. Twelve sections addressing transparency, NDA reform, arbitrator independence, class action restoration, appellate review, and protections for non-profit advocacy organizations.
- Mandatory transparency (§3)
Companies with 10+ consumer arbitrations per year must file quarterly reports with the CFPB and FTC. All data feeds a public searchable database with API access for researchers.
- NDA reform (§4)
Voids NDA provisions preventing consumers from disclosing the dispute, regulatory complaints, safety information, and information shared with attorneys or advocacy organizations.
- Arbitrator independence (§5)
Disqualifies arbitrators who received $20,000+ or served in 5+ proceedings involving the same party within 36 months. Caps single-company revenue at 25%.
- Class action restoration (§6)
Class action waivers are void when 10+ consumers file substantially similar claims. Threshold based on number of affected consumers, not dollar amounts.
- Right of appeal (§7)
Meaningful appellate review for legal error, arbitrator bias, denial of due process, and manifest disregard of evidence. Asymmetric fee-shifting protects consumers.
- Non-profit carve-out (§8)
Consumers may share NDA-protected information with non-profit advocacy organizations for help modifying NDAs, contributing to databases, and reform advocacy.
Arbitration Transparency and Consumer Protection Act
Model legislation for state legislatures. Eight articles designed so that states can adopt the full package or individual articles independently based on political feasibility.
- Public outcome registry (Art. 2)
State-maintained searchable database of consumer arbitration outcomes. Annual summary identifying trends and repeat-offender companies.
- Mandatory opt-out window (Art. 3)
30-day opt-out with at least one electronic method. Plain-language summary at eighth-grade reading level required with every arbitration clause.
- Neutral arbitrator roster (Art. 4)
State-maintained roster of independent arbitrators. Consumers may request roster arbitrator selected by random assignment with one peremptory strike per side.
- Fee shifting (Art. 5)
When consumer prevails, company pays all fees and attorney's fees. Consumer filing fees capped at small claims court rate. Fee waivers for financial hardship.
- NDA limits (Art. 6)
NDAs voidable within three years if imposed without meaningful negotiation. Includes the same non-profit advocacy carve-out as the federal bill.
- Enforcement (Art. 7)
AG enforcement with civil penalties and injunctive relief. Private right of action with $5,000 statutory damages per violation under state consumer protection act.
Modular design — Articles 2 (registry) and 3 (opt-out) carry the lowest FAA preemption risk and are most likely to advance with bipartisan support.
Read the full text of the state bill →How to Use These Bills
🏛 Legislators and legislative staff
These drafts are designed to be adapted for your jurisdiction. Bracketed terms in the state bill indicate where state-specific customization is needed. Both bills include severability clauses so that individual provisions survive even if others are challenged.
📣 Advocates and coalition partners
Use these bills as the foundation for your arbitration reform advocacy. The section-by-section structure makes it easy to build support for individual provisions even when the full package is not politically viable.
⚖ Attorneys and legal academics
We welcome technical review and feedback. These are working drafts and will be refined as we receive input from practitioners, scholars, and legislative counsel.
📰 Journalists and researchers
Both bills are public documents offered for unrestricted use. No permission is needed to cite, quote, excerpt, or reproduce any portion.
To discuss co-sponsorship, adaptation for your state, or technical feedback, contact Make Sure It Happens Inc. — ithappens@msih.org
Legislative Context
The only successful federal arbitration reforms in modern history are the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (signed March 2022) and the Speak Out Act (signed December 2022). Both passed with bipartisan support. Both were narrowly scoped to sexual harassment and assault claims.
The FAIR Act — which would prohibit pre-dispute arbitration agreements in consumer contracts — has passed the House twice (116th and 117th Congresses) but has never cleared the Senate.
These model bills chart a middle path: more comprehensive than the 2022 laws, more targeted than the FAIR Act, and designed so that individual components can advance independently as political conditions allow.
Draft date: April 2026 — Working draft, subject to revision.
Make Sure It Happens Inc. —
Open Arbitration
This document is offered for unrestricted public use.