Whether To Institute A Pre-Dispute Arbitration Policy Waiving Class & Collective Action Claims In The Wake of AT&T Mobility LLC v. Concepcion

The United States Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion , upholding a class action waiver in a consumer contract, has refocused the attention of employers on the efficacy of requiring all employees to enter into pre-dispute arbitration agreements covering all employment-related claims. The Supreme Court’s decision, while not directly addressing employment law claims, fortifies the rulings of numerous lower courts compelling the arbitration of employment law claims brought as purported class or collective actions, with the effect of relegating those class claims to proceed as individual claims in arbitration. The application of the AT&T Mobility decision in the employment law context will no doubt be challenged. The Supreme Court’s continued emphasis on the principle that arbitration agreements should be enforced according to their express terms, however, makes it highly likely that properly drafted class and collective action waivers in employment-related arbitration agreements will be enforced by the courts.

We provide this Strategy and Insight Alert to assist the majority of employers that do not currently have mandatory, pre-dispute arbitration programs in considering whether to adopt such a program and, if so, how to best structure such a program. For those employers that already have arbitration agreements with their employees, the decision to revise those existing agreements may be less difficult, but the form and substance of such a revision and its implementation should nonetheless be carefully considered. In either case, this Alert provides our thoughts about (1) the advantages and risks attendant to employment arbitration agreements; (2) the factors employers should consider in deciding whether to use them; and (3) how such agreements should be drafted to maximize their enforceability and effectiveness in resolving employment-related disputes.