Class Action Waivers Declared Enforceable By The U.S. Supreme Court

On April 27, 2011, the U.S. Supreme Court—in AT&T Mobility v. Concepcion¹—held that class action waivers in consumer contracts are enforceable under the Federal Arbitration Act. The Court's ruling is likely to have far-reaching consequences not only for class actions between consumers and companies, but also for class actions between employees and employers, and parties in similar relationships. In effect, the Court's decision may allow a company to enforce, throughout the United States, customer agreements that contain arbitration provisions waiving class actions.

The Concepcion case involved consumer-plaintiffs who contracted with AT&T for cellular phone service and the purchase of cell phones. The wireless service agreement between the parties included an arbitration provision and a class action waiver clause, which together required that any dispute between the parties be arbitrated on an individual basis (i.e., no class actions). Despite the arbitration