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Supreme Court approves class-action waivers in arbitration

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in Employment Law,Human Resources

by Tracey Barbaree and Michelle Leetham, Esqs.

On April 27, the U.S. Supreme Court held that the Federal Arbitration Act (FAA) protects a company’s right to include a class-action waiver in its arbitration agreement even though a state law bars such provisions as unconscionable. In a 5-4 decision, the court ruled, “States cannot require a procedure that is inconsistent with the FAA, even if it is desirable for unrelated reasons.” (AT&T Mobility LLC v. Concepcion, No. 09-893, U.S. Supreme Court, 2011)

The case involved a retail consumer transaction, but it could have important implications for employers that use arbitration agreements.

Free cell phones, but …

In 2002, Vincent and Liza Concepcion received free cell phones from AT&T Mobility, but their service contract required them to pay sales tax. The agreement also called for arbitration of all disputes—and specifically ruled out class action.

The Concepcions sued AT&T, cla...(register to read more)

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