Agreements requiring individual arbitration and waiving class and collective procedures are generally enforceable.
The basis. Arbitration agreements are enforced according to their terms, and a class waiver is a term. Arguments that the waiver conflicts with labour law protections for concerted activity were rejected.
Where waivers do not reach. Claims excluded by statute from predispute arbitration; claims by employees exempt from the federal arbitration act; representative claims brought on behalf of a state under enforcement statutes in some jurisdictions, though the individual component of such claims may be compelled; and injunctive relief sought on behalf of the public in some states.
Mass arbitration as the practical response: thousands of individual demands filed simultaneously, generating fee exposure that exceeds the aggregate value of the claims.
Drafting responses. Batching and bellwether provisions, staged fee obligations, an informal resolution period with an individualised notice requirement, and mediation preconditions. Courts have upheld some and struck others as unconscionable or as delaying tactics.
Opt-out provisions strengthen enforceability by supporting a finding of voluntary agreement, at the cost of some employees opting out.