1. . . . What are they and what’s the current state of the law?
CLASS-ACTION WAIVERS
. . . What are they and what’s the current state of the law?

2. What are class action-waivers?
Clause in an arbitration provision that prevents signatory from proceeding in a class, collective, or representative basis in litigation or arbitration

3. Typical Class-Action Waiver
Parties must bring claims in “individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding.”

4. Why Employers Generally Like Class-Action Waivers…
Dissuade meritless claims susceptible to class treatment
Cost-efficient mechanism to limit expensive litigation
Easy to implement in employment agreements, offer letters, or employee handbooks

5. Criticisms of class-action waivers
Insulates companies from liability to large sums of plaintiffs where relatively small amounts of money are involved
Dissuades individual lawsuits for small amounts of money
Allows big business to overpower the little guy

6. National Labor Relations Board (NLRB)
What is its role in the class-waiver issue?
Champion against class action waivers
NLRB’s position

7. Class-waivers are unenforceable because . . .
Violates Section 7 of the National Labor Relations Act
Employees have the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection
FAA does not mandate enforcement of waiver because the waiver violates the NLRA
FAA exempts from enforcement agreements that are subject to general contract defenses such as illegality

8. Holdings that uphold class-action waivers…
interpreted consistently with ordinary rules of contract interpretation and cannot be subject to special considerations due to concerns invoked by waiver of class rights
class waivers don’t deny a plaintiff any substantive right simply because individual claims would more effectively proceed on a class basis
They are enforceable, not unconscionable

9. Split Among Circuits Class Waivers Enforceable? YES NO SILENT
2nd- NY, CT, VT
5th- TX, LA, MI
8th- ND, SD, NE, MN, IA, MO, AR
11th- AL, GA, FL
7th- IN, IL, WI
9th- CA, NV, OR, WA, AZ, ID, MT, HI, AK
1st- ME, NH, MA, RI
3rd- PA, NJ, DE
4th- WV, VA, NC, SC, MD
6th- MI, OH, KY, TN
10th- UT, WY, CO, NM

10. Surprising Development
Richards v. Ernst & Young, LLP
U.S. Supreme Court punts
Issue still up in the air