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HB26-1236 • 2026

Arbitration Reform

The bill: Prohibits a provision in an arbitration agreement that waives a party's ability to participate in a representative action except as preempted by federal law and disallows the waiver of this

Labor
Passed Legislature

This bill passed both chambers and reached final enrollment, even if later executive action is not shown here.

Sponsor
Rep. J. Mabrey, Rep. Y. Zokaie, Sen. M. Ball, Sen. N. Hinrichsen
Last action
2026-04-07
Official status
House Committee on Judiciary Witness Testimony and/or Committee Discussion Only
Effective date
Not listed

Plain English Breakdown

The bill summary provided does not include information about exemplary damages being allowed. The candidate explanation incorrectly states that the ban on giving extra damages is removed.

Arbitration Reform

This bill changes Colorado's arbitration laws to protect employees and consumers by limiting certain provisions in arbitration agreements.

What This Bill Does

  • Prohibits an agreement from stopping someone from joining a group lawsuit if they are an employee or consumer, except as preempted by federal law.
  • Stops agreements that require employees or consumers to pay more than the usual court fees for filing a claim, except as preempted by federal law.
  • Does not allow individuals with unfair rules against certain groups to be arbitrators in disputes involving employers and employees or merchants and consumers.
  • Requires employers and merchants to provide copies of arbitration decisions within 30 days, or face extra penalties if they do not comply.

Who It Names or Affects

  • Employees who have agreements with their employers
  • Consumers who make deals with merchants
  • Employers and merchants involved in arbitration proceedings

Terms To Know

Representative action
A type of lawsuit where one person can represent a larger group of people with similar claims.

Limits and Unknowns

  • The bill does not apply if federal law says it cannot.
  • It is unclear how this will affect existing arbitration agreements before the effective date of the new law.

Bill History

  1. 2026-04-07 House

    House Committee on Judiciary Witness Testimony and/or Committee Discussion Only

  2. 2026-02-18 House

    Introduced In House - Assigned to Judiciary

Official Summary Text

The bill:
Prohibits a provision in an arbitration agreement that waives a party's ability to participate in a representative action except as preempted by federal law and disallows the waiver of this prohibition;
Prohibits a provision in an arbitration agreement that requires an employee to an employer and employee contract or a consumer to a merchant and consumer contract to pay fees that substantially exceed the costs required to file a claim in state or federal court, except as preempted by federal law, and disallows the waiver of this prohibition;
Prohibits an individual from serving as an arbitrator if the individual has a rule, policy, procedure, or demonstrated pattern of conduct that discriminates or prevents, or has the effect of discriminating or preventing, a certain party or type of party from asserting their rights or prevailing in arbitration or that discriminates against an attorney; and
Requires an employer or merchant to fully comply with requirements of a record of an award, within 30 days after the date of the record of an award, or be liable for additional damages caused by their failure to comply.
Under current law, exemplary damages are prohibited in arbitration proceedings. The bill repeals this prohibition.
(Note: This summary applies to this bill as introduced.)

Current Bill Text

Read the full stored bill text 
Second Regular Session
Seventy-fifth General Assembly
STATE OF COLORADO
INTRODUCED

LLS NO. 26-0296.02 Jacob Baus x2173 HOUSE BILL 26-1236
House Committees Senate Committees
Judiciary
A BILL FOR AN ACT
CONCERNING ARBITRATION REFORM.101
Bill Summary
(Note: This summary applies to this bill as introduced and does
not reflect any amendments that may be subsequently adopted. If this bill
passes third reading in the house of introduction, a bill summary that
applies to the reengrossed version of this bill will be available at
http://leg.colorado.gov.)
The bill:
! Prohibits a provision in an arbitration agreement that
waives a party's ability to participate in a representative
action except as preempted by federal law and disallows
the waiver of this prohibition;
! Prohibits a provision in an arbitration agreement that
requires an employee to an employer and employee
contract or a consumer to a merchant and consumer
HOUSE SPONSORSHIP
Zokaie and Mabrey,
SENATE SPONSORSHIP
Ball and Hinrichsen,
Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.
Capital letters or bold & italic numbers indicate new material to be added to existing law.
Dashes through the words or numbers indicate deletions from existing law.
contract to pay fees that substantially exceed the costs
required to file a claim in state or federal court, except as
preempted by federal law, and disallows the waiver of this
prohibition;
! Prohibits an individual from serving as an arbitrator if the
individual has a rule, policy, procedure, or demonstrated
pattern of conduct that discriminates or prevents, or has the
effect of discriminating or preventing, a certain party or
type of party from asserting their rights or prevailing in
arbitration or that discriminates against an attorney; and
! Requires an employer or merchant to fully comply with
requirements of a record of an award, within 30 days after
the date of the record of an award, or be liable for
additional damages caused by their failure to comply.
Under current law, exemplary damages are prohibited in
arbitration proceedings. The bill repeals this prohibition.
Be it enacted by the General Assembly of the State of Colorado:1
SECTION 1. In Colorado Revised Statutes, 13-22-204, amend2
(2)(a); and add (4) as follows:3
13-22-204. Effect of agreement to arbitrate - nonwaivable4
provisions.5
(2) Before a controversy arises that is subject to an agreement to6
arbitrate, a party to the agreement may not:7
(a) Waive or agree to vary the effect of the requirements of8
section 13-22-204.5, 13-22-205 (1), 13-22-206 (1), 13-22-208, 13-22-2099
(3), 13-22-217 (1) or (2), 13-22-226, or 13-22-228;10
(4) A PARTY TO AN ARBITRATION AGREEMENT OR ARBITRATION11
PROCEEDING SHALL NOT WAIVE, AND THE PARTIES SHALL NOT VARY THE12
EFFECT OF, THE REQUIREMENTS IN SECTION 13-22-204.5.13
SECTION 2. In Colorado Revised Statutes, add 13-22-204.5 as14
follows:15
13-22-204.5. Representative action provisions - application.16
HB26-1236-2-
EXCEPT AS PREEMPTED BY FEDERAL LAW , IF THE PARTIES TO THE1
ARBITRATION AGREEMENT OR PROCEEDING ARE AN EMPLOYER AND2
EMPLOYEE OR A MERCHANT AND CONSUMER , A PROVISION IN THE3
CONTRACT THAT WAIVES A PARTY 'S ABILITY TO PARTICIPATE IN A4
REPRESENTATIVE ACTION , INCLUDING A CLASS ACTION OR COLLECTIVE5
ACTION, IS VOID AND UNENFORCEABLE.6
SECTION 3. In Colorado Revised Statutes, 13-22-209, add (3)7
as follows:8
13-22-209. Initiation of arbitration - application.9
(3) EXCEPT AS PREEMPTED BY FEDERAL LAW, IF THE PARTIES TO10
THE ARBITRATION AGREEMENT OR PROCEEDING ARE AN EMPLOYER AND11
EMPLOYEE OR A MERCHANT AND CONSUMER , A PROVISION IN THE12
CONTRACT THAT REQUIRES THE PARTY THAT IS THE EMPLOYEE OR13
CONSUMER TO PAY FEES AND COSTS THAT EXCEED THE FEES AND COSTS14
REQUIRED BY STATE COURTS TO BRING A STATE CLAIM, OR REQUIRED BY15
FEDERAL COURTS TO BRING A FEDERAL CLAIM , IS VOID AND16
UNENFORCEABLE, AND THE PARTY THAT IS THE EMPLOYEE OR CONSUMER17
MAY FILE THE CASE IN COURT.18
SECTION 4. In Colorado Revised Statutes, 13-22-211, add (3)19
as follows:20
13-22-211. Appointment of arbitrator - service as a neutral21
arbitrator.22
(3) A N INDIVIDUAL OR ARBITRATOR , OR AN INDIVIDUAL OR23
ARBITRATOR ASSOCIATED WITH AN ARBITRATION ORGANIZATION , IS24
INELIGIBLE TO INITIATE , SPONSOR , OR ADMINISTER AN ARBITRATION25
PROCEEDING OR TO APPOINT OR SERVE AS AN ARBITRATOR IF THE26
INDIVIDUAL, ARBITRATOR, OR ARBITRATION ORGANIZATION HAS A RULE,27
HB26-1236-3-
POLICY, PROCEDURE, OR DEMONSTRATED PATTERN OF CONDUCT THAT:1
(a) DISCRIMINATES AGAINST A CERTAIN PARTY, TYPE OF PARTY, OR2
ATTORNEY, OR APPLIES DIFFERENT RULES , POLICIES , OR PROCEDURES3
BASED ON HOW MANY CLAIMANTS HAVE FILED SIMILAR CLAIMS OR HOW4
MANY CLAIMS HAVE BEEN FILED FROM THE SAME ATTORNEY; OR5
(b) P REVENTS, OR HAS THE EFFECT OF PREVENTING , A CERTAIN6
PARTY, TYPE OF PARTY, OR ATTORNEY FROM:7
(I) ASSERTING THE PARTY'S RIGHTS IN ARBITRATION; OR8
(II) PREVAILING IN FULL OR IN PART IN ARBITRATION.9
SECTION 5. In Colorado Revised Statutes, 13-22-219, add (3)10
as follows:11
13-22-219. Award - application.12
(3) (a) A PARTY THAT FAILS TO FULLY COMPLY WITH THE13
REQUIREMENTS OF A RECORD OF AN AWARD WITHIN THIRTY DAYS AFTER14
THE DATE OF THE RECORD OF AN AWARD IS LIABLE TO THE OTHER PARTY15
FOR DAMAGES CAUSED BY THE FAILURE TO FULLY COMPLY.16
(b) NOTWITHSTANDING SUBSECTION (3)(a) OF THIS SECTION, IF THE17
PARTIES OF THE ARBITRATION AGREEMENT OR PROCEEDING ARE AN18
EMPLOYER AND EMPLOYEE OR MERCHANT AND CONSUMER AND THE PARTY19
THAT IS THE EMPLOYER OR MERCHANT FAILS TO FULLY COMPLY WITH THE20
REQUIREMENTS OF A RECORD OF AN AWARD WITHIN THIRTY DAYS AFTER21
THE DATE OF THE RECORD OF AN AWARD , THE PARTY THAT IS THE22
EMPLOYER OR MERCHANT IS LIABLE TO THE OTHER PARTY FOR DAMAGES23
IN TREBLE THE TOTAL AMOUNT IN THE RECORD OF AN AWARD CAUSED BY24
THE FAILURE TO FULLY COMPLY.25
(c) THE LIABILITY DESCRIBED IN SUBSECTIONS (3)(a) AND (3)(b)26
OF THIS SECTION IS IN ADDITION TO THE REQUIREMENTS OF A RECORD OF27
HB26-1236-4-
AN AWARD.1
SECTION 6. In Colorado Revised Statutes, 13-22-221, repeal (3)2
as follows:3
13-22-221. Remedies - fees and expenses of arbitration4
proceeding.5
(3) Nothing in this section shall be construed to alter or amend the6
provisions of section 13-21-102 (5).7
SECTION 7. In Colorado Revised Statutes, 13-21-102, amend8
(5) as follows:9
13-21-102. Exemplary damages.10
(5) Unless otherwise provided by law, exemplary damages shall11
not be awarded in administrative or arbitration proceedings, even if the12
award or decision is enforced or approved in an action commenced in a13
court.14
SECTION 8. Act subject to petition - effective date -15
applicability. (1) This act takes effect at 12:01 a.m. on the day following16
the expiration of the ninety-day period after final adjournment of the17
general assembly (August 12, 2026, if adjournment sine die is on May 13,18
2026); except that, if a referendum petition is filed pursuant to section 119
(3) of article V of the state constitution against this act or an item, section,20
or part of this act within such period, then the act, item, section, or part21
will not take effect unless approved by the people at the general election22
to be held in November 2026 and, in such case, will take effect on the23
date of the official declaration of the vote thereon by the governor.24
(2) This act applies to arbitration agreements entered into or25
renewed on or after the applicable effective date of this act.26
HB26-1236-5-