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ARIZONA STATE SENATE
Fifty-Seventh Legislature, First Regular Session
VETOED
AMENDED
employer-employee arbitration; contract; disputes
Purpose
Authorizes arbitration agreements for resolution of certain employment-related disputes between an employer and employee.
Background
Arizona adopted the Uniform Arbitration Act in 1962 and
subsequent revisions in 2010. Uniform acts are promulgated by the National
Conference of Commissioners on Uniform State Laws (NCCUSL) and adopted,
generally with modification, by the states (Laws
1962; Ch. 108; Laws 2010, Ch. 139). A written agreement to submit any existing controversy
to arbitration or a provision in a written contract to submit to arbitration
any controversy thereafter arising between the parties is valid, enforceable
and irrevocable, save upon such grounds as exist at law or in equity for the
revocation of any contract. Unlike the Uniform Arbitration Act promulgated by
NCCUSL, the Arizona Uniform Arbitration Act provided that it had no application
to arbitration agreements between employers and employees or their respective
representatives (A.R.S. §§ 12-3003 and
12-1517).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Deems valid, enforceable and irrevocable a written agreement to arbitrate employment-related disputes between an employer and an employee whose primary job duties directly and necessarily involve the loading, unloading or handling of goods at a warehouse that is leased or owned by the employer, except when grounds exist at law or in equity to revoke the agreement.
2. Stipulates that if an employee initiates arbitration in an employment-related dispute:
a) the employee must be responsible for paying the administrative costs of the arbitration that are the functional equivalent of the initial filling fee in state court; and
b) the employer is responsible for all other administrative costs that are unique to arbitration.
3. Specifies that an employer and employee arbitration agreement does not interfere with an employee's right to file a claim or charge with a government agency.
4. Specifies that the employer-employee arbitration requirements do not apply to an employee who is subject to an enforceable collective bargaining agreement, except to the extent allowed in the collective bargaining agreement.
5. Becomes effective on the general effective date.
Amendments Adopted by House of Representatives
1. Stipulates that if an employee initiates arbitration in an employment-related dispute:
a) the employee must be responsible for paying the administrative costs of the arbitration that are the functional equivalent of the initial filling fee in state court; and
b) the employer is responsible for all other administrative costs that are unique to arbitration.
2. Specifies that an employer and employee arbitration agreement does not interfere with any employee's right to file a claim or charge with a government agency.
3. Specifies that the employer-employee arbitration requirements do not apply to an employee who is subject to an enforceable collective bargaining agreement, except to the extent allowed in the collective bargaining agreement.
Governor's Veto Message
The Governor indicates in her veto message that S.B. 1514 would enshrine forced arbitration in Arizona law mandating a take-it-or-leave-it approach to employment practices that hurts working Arizonans.
Senate Action House Action
RAGE 2/20/25 DP 4-2-1 TI 3/19/25 DPA 4-1-1-1
3rd Read 2/27/25 18-11-1 3rd Read 6/18/25 34-25-1
Final Read 6/19/25 18-12-0
Vetoed by the Governor 6/27/25
Prepared by Senate Research
August 27, 2025
JT/JRM/KP/ci