On Oct. 2, 2017, the Supreme Court heard oral argument as to whether class action waivers in arbitration agreements are valid and enforceable. In their Employment Law Strategist article “SCOTUS Decision on Mandatory Employment Arbitration Agreements Will Have Far-Reaching Implications,” Ryan Saba and Krystle Meyer discussed the potential implications for both employers and employees regardless of which way the Court decides this issue.
While employers had long used the protections of the Federal Arbitration Act to require employees to consent to mandatory arbitration in employment agreements, after 2011’s AT&T Mobility LLC v. Concepcion decision, employers who wanted to avoid class and collective actions from their employees increasingly included class and collective action waivers in their employment arbitration agreements. This caused a flurry of litigation, as well as an eventual circuit split between federal courts interpreting the validity of such class action waivers in the employment context.
If the Supreme Court determines that such class action arbitration waivers are unenforceable in the employment context, employers may have to incentivize their current employees and prospective employees to sign separate, negotiated agreements, and provide additional compensation, benefits or vacation time.
Mr. Saba and Ms. Meyer concluded the article by noting that at the very least, the Supreme Court resolution will hopefully, provide employers and employees nationwide with guidance for what to expect with respect to class action waivers in the arbitration clauses of employment agreements.