Originally from Alternatives to the High Cost of Litigation

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Mass arbitration has emerged following efforts by corporate employers to safeguard the enforceability of their employment and consumer arbitration provisions, and plaintiffs’ moves to pursue individual arbitration remedies in the face of court-backed mandatory employment arbitration programs that prohibit court cases.

For years, companies have incorporated arbitration clauses and class action waivers in their employment contracts and user agreements. The U.S. Supreme Court has directly addressed the legitimacy of these arbitration agreements. It has held that the Federal Arbitration Act trumps state law that restricts the applicability of these arbitration agreements and the Federal Arbitration Act at 9 U.S.C. 1 et. seq. (available at https:// bit.ly/2Kc8zca). See AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (available at https://bit.ly/3NFhukJ). The Court’s judgment in the consumer contract case, which ostensibly favored corporate defendants, demonstrated that arbitration agreements must be enforced “according to their terms.” Id. at 344.

But in permitting companies to strictly administer their class action waivers and arbitrate claims individually, the nation’s top court opened the floodgates for opportunistic moves by plaintiffs’ firms, who saw the AT&T Mobility judgment—as well as the Supreme Court’s employment arbitration decision backing mandatory predispute arbitration agreements for members of the nation’s workforce in Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018) (available at http://bit.ly/2Y66dwK)—as a chance to file thousands of individual arbitration actions, forcing corporate defendants to pay millions in administrative fees for their required arbitrations.