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HB26-1236 • 2026

Arbitration Reform

The act: Prohibits a provision in an arbitration agreement that requires an employee to an employer and employee contract or a consumer to a business and consumer contract to pay fees that substantial

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, Rep. J. Bacon, Rep. K. Brown, Rep. J. Joseph, Rep. S. Lieder, Rep. M. Lindsay, Rep. K. Nguyen, Rep. E. Sirota, Sen. A. Benavidez, Sen. J. Coleman, Sen. C. Kipp
Last action
2026-05-08
Official status
Senate Second Reading Special Order - Passed with Amendments - Committee
Effective date
Not listed

Plain English Breakdown

The official summary does not define 'Arbitration agreement', so that term was removed from terms_to_know to avoid adding outside information.

Arbitration Reform Act

This law limits arbitration fees for employees and consumers, bans biased arbitrators, sets a deadline to pay awards, and allows higher damages in some cases.

What This Bill Does

  • Prohibits contracts from requiring employees or consumers to pay arbitration fees that are much higher than court filing costs.
  • Stops people with rules or patterns of discrimination against certain parties or lawyers from serving as arbitrators.
  • Requires the losing party in an arbitration to fully follow award rules within 120 days or face extra financial penalties.
  • Removes the current rule that bans exemplary damages, which are higher payments meant to punish bad behavior.

Who It Names or Affects

  • Employees who sign contracts with employers
  • Consumers who sign agreements with businesses
  • Arbitrators selected for dispute cases
  • Parties involved in arbitration awards

Terms To Know

Exemplary damages
Extra money awarded to punish unfair actions, which is now allowed under this law.

Limits and Unknowns

  • The law does not apply if federal laws say otherwise.
  • People cannot sign away their right to these protections by agreeing to a waiver.
  • The specific date the law takes effect is not listed in this text.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

L.002

HOU Judiciary

Passed [*]

Plain English: This amendment clarifies that the bill's rules about arbitration fees apply specifically to cases filed in state or federal courts.

  • Changes the word 'CLAIM' on page 3, line 15 to specify it means a claim for a case filed in state court.
  • Changes the word 'CLAIM' on page 3, line 16 to specify it means a claim for a case filed in federal court.
  • The amendment text only shows specific words being changed and does not explain how this affects other types of claims or cases outside of state and federal courts.
  • Without the full context of the original bill, it is unclear if these changes limit where employees or consumers can file their disputes.
L.003

HOU Judiciary

Passed [*]

Plain English: This amendment clarifies that an arbitrator cannot be disqualified just because they often rule in favor of one side.

  • It updates the numbering format for specific sections to fix a formatting error.
  • The text only provides technical instructions on how to edit lines and numbers, so it does not explain what subsection (3)(a) originally says or who exactly counts as an 'arbitration organization' without reading the full bill.
  • Because this is a formatting fix with one new sentence added, the exact impact depends on rules in other parts of the law that are not included here.
L.005

HOU Judiciary

Passed [*]

Plain English: This amendment changes the time limit in the bill from thirty days to ninety days.

  • The word 'THIRTY' is replaced with 'NINETY' on page 4, line 14 of the original bill.
  • The word 'THIRTY' is also replaced with 'NINETY' on page 4, line 21 of the original bill.
  • The amendment text does not explain what specific event or deadline these numbers refer to because it only shows where words are changed.
  • Without seeing the full context of lines 14 and 21, we cannot say exactly how this change affects employees or consumers.
L.006

HOU Judiciary

Passed [*]

Plain English: This amendment removes specific parts of the bill that listed a state law and detailed rules about arbitration fees.

  • It deletes a reference to Colorado Revised Statute section 13-22-204.5 from page 2.
  • It removes six lines of text on page 2 that likely contained specific definitions or requirements.
  • The amendment only shows which words are deleted but does not provide the new replacement text for those sections, so it is unclear exactly what rules remain in place.
  • Because the full content of the removed lines is missing from this document, we cannot explain the specific details about arbitration fees that were taken out.
L.007

HOU Judiciary

Passed [*]

Plain English: This amendment fixes a wording error in the bill by replacing confusing phrases with simpler words.

  • It changes the phrase 'THE RECORD OF AN' to 'THAT' on page 4, line 15 of the original bill text.
  • It makes the same change from 'THE RECORD OF AN' to 'THAT' again on page 4, line 22.
  • The amendment only shows specific word replacements and does not explain what sentence these words belong to or how they affect the final meaning of the law.
  • Without seeing the full original text around lines 15 and 22, it is unclear exactly which part of the arbitration rules this correction applies to.
L.011

SEN Judiciary

Passed [*]

Plain English: This amendment changes the bill to ban arbitration fees that are 'substantially' high instead of just excessive, extends a waiting period from 90 days to 120 days in two places, lowers penalty damages from triple to double amounts, and pauses this time limit if an appeal happens.

  • Changes the rule so arbitration agreements cannot require employees or consumers to pay fees that are 'substantially' high instead of just exceeding a certain amount.
  • Increases a specific waiting period mentioned in two places from ninety days to one hundred twenty days.
  • Reduces the penalty for breaking these rules from three times (treble) damages to two times (double) damages.
  • Adds a rule that stops the 120-day clock if someone appeals a decision.
  • The amendment text does not explain exactly what 'substantially' means in this context, so it is unclear how courts will decide which fees are too high.
  • The specific sections of the law that define who gets these penalties or when they apply are not included in the provided text.
L.012

SEN Judiciary

Passed [*]

Plain English: This amendment fixes the numbering and formatting of a list in the bill but does not change any rules about what fees employees or consumers must pay.

  • Updates letter labels like (a), (b), and (I) to match standard legal writing formats on page 3.
  • Replaces two lines of text with a new heading that says 'BRINGING A CLAIM IN ARBITRATION'.
  • Removes seven lines of existing text from the top of page 4.
  • The amendment only shows changes to labels and headings, so it is unclear what specific rules were removed on page 4 without seeing the original full bill.
  • Because the actual content being deleted or added is not fully described in this text, we cannot explain how the law would change for people using arbitration.
L.013

Second Reading

Lost [**]

Plain English: This amendment would remove a specific set of rules from the bill that deals with arbitration fees.

  • It deletes lines 6 through 12 on page 5 of the original bill.
  • The provided text does not say exactly what words or rules are in the deleted section, so it is unclear which specific fee protections would be removed.
  • Because the amendment was marked as 'Lost', this change did not become part of the final bill.
L.014

Second Reading

Lost [**]

Plain English: This amendment would require the Colorado Department of Law to study and report on how House Bill 26-1236 changes the number, cost, and outcomes of legal cases that move from private arbitration to public court.

  • It creates a new law requiring the Department of Law to collect statewide data starting July 1, 2028.
  • The study compares two years before and after the bill passes to see how many more cases go to court instead of arbitration.
  • It tracks changes in money awarded to plaintiffs, costs for enforcing awards, court administrative expenses, and attorney fees.
  • A final report with these findings must be published by January 31, 2029, and sent to the state legislature.
  • The amendment text does not explain how officials will identify which specific cases would have been arbitrated if this bill did not exist.
  • This amendment was marked as 'Lost' in the legislative process, meaning it may not become part of the final law.
L.015

Second Reading

Passed [**]

Plain English: This amendment changes the word 'merchant' to 'business' in several places within the bill.

  • Replaces the term 'MERCHANT' with 'BUSINESS' on page 3, line 1 of the bill.
  • Updates three additional instances where 'MERCHANT' appears on page 4 (lines 17, 18, and 21) to say 'BUSINESS' instead.
  • The amendment text only shows specific word replacements and does not explain the full context of how these terms are used in the law.
  • It is unclear if this change affects which types of companies or people must follow the new rules, as that depends on other parts of the bill.

Bill History

  1. 2026-06-02 Governor

    Governor Vetoed

  2. 2026-05-29 Governor

    Sent to the Governor

  3. 2026-05-29 Senate

    Signed by the President of the Senate

  4. 2026-05-29 House

    Signed by the Speaker of the House

  5. 2026-05-13 House

    House Considered Senate Amendments - Result was to Concur - Repass

  6. 2026-05-13 Senate

    Senate Third Reading Passed - No Amendments

  7. 2026-05-12 Senate

    Senate Third Reading Laid Over Daily - No Amendments

  8. 2026-05-11 Senate

    Senate Second Reading Special Order - Passed with Amendments - Committee, Floor

  9. 2026-05-08 Senate

    Senate Second Reading Special Order - Passed with Amendments - Committee

  10. 2026-05-08 Senate

    Senate Second Reading Special Order - Laid Over to 05/11/2026 - No Amendments

  11. 2026-05-06 Senate

    Senate Committee on Judiciary Refer Amended to Senate Committee of the Whole

  12. 2026-04-30 Senate

    Introduced In Senate - Assigned to Judiciary

  13. 2026-04-28 House

    House Third Reading Passed - No Amendments

  14. 2026-04-27 House

    House Second Reading Special Order - Passed with Amendments - Committee

  15. 2026-04-22 House

    House Committee on Judiciary Refer Amended to House Committee of the Whole

  16. 2026-04-07 House

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

  17. 2026-02-18 House

    Introduced In House - Assigned to Judiciary

Official Summary Text

The act:
Prohibits a provision in an arbitration agreement that requires an employee to an employer and employee contract or a consumer to a business 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 preventing, a certain party, type of party, or attorney from asserting the party's right in arbitration or bringing a claim in arbitration; and
Requires a party to fully comply with requirements of a record of an award, within 120 days after the date of the award, or be liable for additional damages caused by their failure to comply.
Under current law, exemplary damages are prohibited in arbitration proceedings. The act repeals this prohibition.
(Note: This summary applies to this bill as enacted.)