Yes, fails is a Scrabble word!
...and is worth 8 points in Scrabble, and 9 points in Words with Friends
fails
Verb
1. Fail to do something; leave something undone
2. Be unsuccessful
3. Disappoint, prove undependable to; abandon, forsake
4. Stop operating or functioning
5. Be unable
6. Judge unacceptable
7. Fail to get a passing grade
8. Fall short in what is expected
9. Become bankrupt or insolvent; fail financially and close
10. Prove insufficient
11. Get worse
What Scrabble words can I make with the letters in fails?
5 Letter Words
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2 Letter Words