Employers across the country have witnessed a flurry of significant decisions in recent years culminating in several U.S. Supreme Court rulings reinforcing the enforceability of arbitration agreements generally, and more specifically, class action waiver provisions. These headline-grabbing cases have sparked renewed debate as to whether arbitration programs are advisable, particularly in California where the fate of class action waivers is less certain and existing case law imposes a number of requirements on the contents of arbitration agreements.
You had me at “class action waiver”
The most significant reason why more employers have suddenly taken the plunge to implement agreements, or rushed to modify their existing programs, is the desire for a class action waiver. Such waivers are intended to prohibit employees from pursuing any class or collective action claims in arbitration, which is very attractive to companies that fear being the recipient of the dreaded (and relentlessly common) wage and hour class action or the less common, but at least as costly to defend, class discrimination suit. Many courts across the country, applying the United States Supreme Court’s recent decisions, have upheld class action waivers. However, in California, the validity of class action waivers remains unresolved.
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