Franchise companies are especially susceptible to class action complaints. The class actions are often brought by consumers buying the franchisor’s branded products and services, and by franchisees claiming systemwide contractual defaults.
Many franchisors seek to thwart class treatment by requiring arbitration of disputes by consumers and franchisees with arbitration clauses that contain waivers of class treatment. Recent U.S. Supreme Court decisions have confirmed this strategy will defeat class treatment for franchisees and consumers where the arbitration clause waives class treatment. (See Stolt-Nielson v. AnimalFeeds International Group (2010) and AT&T Mobility v. Concepcion (2011).) These decisions overrule state law decisions of unconscionability as conflicting with the federal policy encouraging arbitration.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]
