House Bill 26-032

This act generally prohibits businesses and employers from requiring pre-dispute arbitration agreements as a condition of employment, continued employment, purchasing or using consumer goods and services, obtaining housing, accessing financial or insurance services, or using digital platforms and applications. The act is intended to preserve access to the courts by requiring arbitration to be knowingly and voluntarily agreed to rather than imposed through standardized or take-it-or-leave-it contracts. Pre-dispute arbitration agreements remain enforceable in commercial contracts valued at more than $1 million, and a corporate officer who knowingly includes a prohibited arbitration clause in a consumer or employment contract commits a class 2 misdemeanor.

This act permits parties to voluntarily agree to arbitration after a dispute has arisen, with any party allowed to revoke that agreement within 14 days. Arbitration may also be used between commercial entities of comparable bargaining power when the agreement is individually negotiated, clearly discloses the waiver of access to a judicial forum, provides for a neutral arbitrator, and allows reasonable discovery. The restrictions do not apply where arbitration is required by federal law or where federal law preempts state requirements, and arbitration agreements may not waive substantive statutory rights.

This act preserves an individual's right to bring claims in court, participate in class or collective actions, and seek public injunctive relief when otherwise authorized by law. Pre-dispute waivers of these rights are void and unenforceable, and the act declares participation in a class or collective action an inalienable right that cannot be waived through a dispute-resolution agreement. Permitted arbitration agreements must be in writing, clearly and conspicuously presented in at least 14-point font or its digital equivalent, state that arbitration is voluntary, and be provided in the primary language of the consumer or employee. The party seeking to enforce an arbitration agreement bears the burden of proving that these requirements were satisfied.

This act authorizes the Attorney General to enforce its requirements and impose civil penalties of up to $5,000 per violation. Individuals affected by violations may bring individual, class, or collective actions seeking declaratory or injunctive relief, actual damages, statutory damages of at least $2,500 per violation, and attorney fees and court costs. The prevailing party in a civil action is entitled to reasonable attorney fees and costs. This act was approved May 28, 2026, and is scheduled to take effect August 18, 2026.