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Supreme Court OKs class-action waivers in arbitration pacts

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in Employment Law,Human Resources

The U.S. Supreme Court has ruled that employers do have the right to include class-action waivers in their arbitration agreements. Under such provisions, em­­ployees agree to arbitrate their employment disputes and waive their rights to participate in class-action lawsuits or class arbitrations.

In the 5-4 decision, the Supreme Court said the Federal Arbitration Act (FAA) pre-empts any state laws that would try to nullify an arbitration clause that bars class-wide arbitrations.

Bottom line: Employers seeking to avoid class-action litigation should consider including arbitration clauses with class-action waivers in their contracts.

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