SCOTUS Decision on Mandatory Employment Arbitration Agreements Will Have Far-Reaching Implications

On April 27, 2011, in AT&T Mobility LLC v. Concepcion, the Supreme Court held that, in the consumer context, class action waivers in arbitration agreements are enforceable under the Federal Arbitration Act (FAA), because the FAA makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.” See 563 U.S. at 333-34. While employers had long used the protections of the FAA to require employees to consent to mandatory arbitration in employment agreements, after Concepcion, employers desirous of avoiding class and collective actions from their employees increasingly included class and collective action waivers in their employment arbitration agreements. This naturally resulted in a maelstrom of litigation and an eventual circuit split between federal courts interpreting the validity of such class action waivers in the employment context.