Supreme Court Affirms Class Action Waivers in Employment Arbitration Agreements
Since the Federal Arbitration Act’s (FAA) enactment in 1925, parties have sparred over the enforceability of arbitration agreements in a number of contexts. In recent years, the battle has focused on the enforceability of class or collective action waivers, pursuant to which parties agree to forgo their right to proceed on a class basis and to pursue claims in arbitration on an individual basis instead. Between 2011 and 2013, the United States Supreme Court issued several opinions enforcing class action waivers in the consumer context, but none dealt with employment arbitration agreements. On Monday, the United States Supreme Court removed any doubt that class or collective action waivers contained in employment arbitration agreements are enforceable, affirming a potential cure for the employment class action epidemic.
The argument that employment class action waivers are different from consumer class action waivers derives from Section 7 of the National Labor Relations Act (NLRA), which guarantees employees the right to engage in collective activities