Class Actions Are Dead. Long Live Class Actions?: The Implications of AT&T Mobility LLC v. Concepcion for Employers


As our colleagues who litigate consumer class actions reported in last week’s client alert, the United States Supreme Court handed businesses a major victory last Wednesday, overturning California law to uphold a mandatory arbitration agreement that included a class action waiver. We take a more in-depth look at the decision with an eye toward what it means for employers.

In AT&T Mobility LLC v. Concepcion,1 the arbitration provision at issue was part of a two-year AT&T service contract, requiring California residents Mr. and Mrs. Concepcion to arbitrate any disputes with AT&T and prohibiting them from adjudicating their disputes as part of a class action—commonly referred to as a “class action waiver.”

The Concepcions challenged the arbitration agreement because of the class action waiver. The trial and appellate courts sided with the Concepcions and struck down the AT&T arbitration agreement based upon a rule established by the California Supreme Court in a 2005 case called Discover Bank v. Superior Court.2 The Discover Bank rule holds...

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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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