I recently contributed an article to Thomson Reuters’ Legal Current on Practical Considerations Regarding Class Action Waivers in Arbitration Agreements:
After the Supreme Court decision in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) – which held that class action waivers in arbitration agreements are valid under the Federal Arbitration Act (“FAA”) – companies rushed into class action waiver arbitration agreements without heeding the proverb, “Look before you leap.” While avoiding class actions is an admirable goal, doing so through arbitration agreements may lead to unintended and painful consequences. In addition, many companies have found courts reluctant to enforce the class action waiver and/or the arbitration clause, which can cost tens of thousands of dollars in law and motion practice only for the case to remain in state or federal court. Read the full article here.
As I state in the article, “If it is advisable to adopt an arbitration clause with a class action waiver, a company should be aware that arbitration agreements are not widgets: one size does not fit all.” It is always advisable to have legal counsel draft agreements that are specific to your company and its intended goals.
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