Supreme Court to Decide High-Stakes Question for Employers With Arbitration Agreements: Does An Agreement To Arbitrate "All" Disputes Authorize An Arbitrator To Conduct A "Class Arbitration"?

For an employer, what could be worse than a class action lawsuit? Quite possibly, a "class arbitration." Like a class action suit, class arbitration is a proceeding in which one or a few claimants try to assert claims on behalf of many, sometimes hundreds or thousands, of other current and former employees. But a class arbitration is decided by an arbitrator rather than in court. There is no judge or jury, and the relatively clear rules of procedure or evidence that apply in court may or may not be followed. The arbitrator has almost plenary authority over the proceedings, subject to only very limited appeal rights. For employers facing wage and hour claims under the Fair Labor Standards Act, class arbitration poses the additional risk that an arbitrator might disregard the special opt-in procedures that apply to FLSA collective actions in favor of generic opt-out class action rules -- a change that could dramatically raise the monetary stakes.

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