Supreme Court Rules Class Action Waiver in Arbitration Agreement is Enforceable

On April 27, 2011, the US Supreme Court ruled 5-4 that a class action waiver contained in an arbitration agreement is enforceable.  In AT&T Mobility LLC v. Concepcion, the Supreme Court decided that the Federal Arbitration Act preempts a California law that the class-action ban in an arbitration agreement was unenforceable. Employers can require employees to sign arbitration agreements as a requirement of their job – that means that an employee can be fired or have the job offer rescinded if they refuse to sign the arbitration agreement.  Accordingly, an employer can require an employee to waive the right to participate in a class action lawsuit and be forced to resolve any claim before an arbitration panel.

April 28, 2011 – Castronovo & McKinney – Tom McKinney