Legal Alert: Supreme Court Finds FAA Preempts State Law Prohibiting Class Action Waivers in Arbitration Agreements

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This article is a continuation of Ford & Harrison LLP's focus on the use of arbitration agreements to protect employers from collective/class-action exposure under the Fair Labor Standards Act.

On April 27, 2011, the United States Supreme Court issued AT&T Mobility LLC v. Concepcion addressing the enforceability of an arbitration agreement in a consumer contract that prohibited classwide arbitration. In a 5-4 decision, the Court held that the agreement was enforceable, reversing the Ninth Circuit's determination that the agreement prohibiting class claims was unconscionable under California law. The Concepcion decision is a strong indication that an arbitration agreement prohibiting classwide arbitration in the employment context would be enforceable. (For a link to the Concepcion slip opinion, click here).

Please see full alert below for more information.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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