Future Enforceability of Class Action Waivers in Arbitration Agreements
Topics: Arbitration Agreements
There is an insightful article in this week’s National Law Journal regarding recent and upcoming United States Supreme Court decisions on the enforceability of class action waivers in pre-dispute arbitration agreements. To view the article, click here.
As we recently reported on our blog, the United States Supreme Court will be reviewing the Ninth Circuit’s decision in AT&T Mobility v. Concepcion this term. In that case, the Ninth Circuit held that a class action waiver in a consumer arbitration agreement was unconscionable and unenforceable under California law. The Supreme Court is expected to decide whether the Federal Arbitration Act preempts California law in this area, thereby rendering class action waivers of this nature valid and enforceable. Although the Concepcion case is a consumer case, not an employment case, the ruling certainly has the potential to impact the enforceability of class action waivers in the employment arbitration context. Thus far, California courts have generally held that class action waivers in the employment arbitration arena are often unconscionable and unenforceable, except in limited circumstances. A ruling that the FAApreempts California unconscionability jurisprudence would be very significant for California employers.
Stay tuned for the Supreme Court decision in the AT&T v. Concepcion case, expected in the Spring of 2011.