Class Action Waivers In Arbitration Agreements

The Chamber also took charge of the Administrative Judge`s finding that the respondent had contravened the law by announcing, after having carried out the protected concerted activity, to discuss with his employees matters relating to his salary and to bring a class action under the FLSA. Citing Epic, the board drew the line between disciplining an employee for refusing to sign a class and class action waiver arbitration agreement, which is legal, and discipline, including firing an employee after filing a class or class action, for concerted activity that is illegal. In the weeks following SCOTUS` decision, organizations asked important and thoughtful questions about the implementation and use of arbitration agreements and waiver statements with their staff. While no guide is “one-size-fits-all,” these FAQs can help address common issues. In this case, the Board considered two first-impression issues: (1) whether employers are prohibited by law from entering into non-class and class action agreements in response to workers who opt for class action; and (2) if employers are prohibited by law from threatening to dismiss a worker who refuses to sign a binding arbitration agreement that includes statements of waiver of class and class actions. The Council answered both questions in the negative. It is difficult to know the practical implications of the broad delegation of dispute resolution by the courts to arbitration, given that arbitration is private and arbitral awards are generally not made public. However, surveys indicate that consumers and employees are less likely to win their cases when they are tried in arbitration and, if they win, the amounts of damages are much lower than what would be the case for a court. In addition, there is important evidence that people who have suffered from corporate misconduct are prevented from asserting their rights as a whole, as arbitration proceedings may be too costly and the results may be too risky for consumers or individual workers.

In particular, the ban on class actions makes it unlikely that many allegations of corporate misconduct – especially those involving modest sums of money for large groups of individuals – will ever be heard. As Justice Breyer said, “Only a madman or a fanatic complains about $30.” 68 This attitude is a clear gain for employers whose arbitration agreements do not include an explicit waiver of class actions. However, in order to be able to impose presumed class actions on an individual basis, the arbitration agreement itself must still be enforceable. They can expect staff to continue to question the applicability of arbitration agreements. The most controversial issue in arbitration today stems from the interaction between arbitration and class actions. Composite Arbitration – Class action waivers have become common in contracts offered by credit card companies, banks, mobile operators and providers of other common services8. it is impossible to defend legal rights. Some state courts and lower federal courts have refused to impose these composite clauses for both reasons, but recent Supreme Court decisions call these decisions into question. One of the most frequent objections to arbitration clauses is that they are unscrupulous.

The faculty of scruples is an established doctrine in contractual matters that states that a contract that, in its terms and / or in the way it was obtained, is grossly abusive, is not applied. . . .