Arbitration

Fifth Circuit Reaffirms Enforceability of Class Action Waivers in Employment Arbitration Agreements, But Their Fate Remains Unclear

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Employers commonly use arbitration agreements to minimize the expense and exposure of employment-related claims.   By mandating arbitration of employment disputes, they hope to ensure that these matters are resolved in a cost-effective and confidential manner.  Many arbitration agreements go a step further, requiring employees to pursue their claims individually, and to waive their right to proceed on a class or collective basis.   Unfortunately, the certainty employers have striven to achieve with such agreements has proven elusive in recent years, as the National Labor Relations Board (NLRB) and several courts have found that class action waivers violate employees’ rights.

Although the U.S. Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion upheld the enforceability of class action waivers in the consumer context, in the years since, the NLRB has repeatedly rejected the use of class action waivers in the employment context.  In In re D.R. Horton, the NLRB held that class action waivers inherently infringe on employees’

Court Denies Uber Motion to Compel Arbitration of Class Antitrust Claims Because Mobile App’s Terms of Service Were Inconspicuous

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Late last week, influential federal judge Jed Rakoff of the Southern District of New York denied a motion to compel arbitration of an antitrust class action complaint pending against ride-hailing pioneer Uber Technologies. The case, Meyer v. Kalanick and Uber Technologies, Inc., Case No. 15 Civ. 9796 (S.D.N.Y. July 29, 2016),  may represent an installment in the pendulum swing against mandatory arbitration and class action waiver clauses in consumer contracts.

Uber’s mobile app contains a hyperlink to terms and conditions that include a mandatory arbitration clause.  But Judge Rakoff, applying California law, ruled that consumers registering for Uber service were not obligated to visit or click through those terms in the app version at issue, and therefore never assented to arbitration. The court also found that Uber’s terms of service hyperlink was presented to Android users in “barely legible” fine print at the bottom of the screen, and that its arbitration clause was buried in “nine pages of highly legalistic