The United States Supreme Court in DirecTV, Inc. v. Imburgia, et al., No. 14-462 (Dec. 14, 2015) breathed new life into arbitration agreements that contain class action waivers. After the California Court of Appeals ruled that arbitration agreements and class action waivers were unenforceable, the U.S. Supreme Court looked at the issue and held, in a 6-3 decision that the California Court of Appeal’s restrictive interpretation of the arbitration agreement was inconsistent with the Federal Arbitration Act (FAA) which pre-empted state law, and that the FAA requires that the arbitration agreement, including the class action waiver, be enforced.

Based on this decision it now makes sense to include arbitration provisions with class action waivers in your customer and client contracts. While the decision does not directly address employment agreements, we suggest you determine whether arbitration provisions and class
action waivers can protect your business from expensive, drawn out employment claims.

The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.