Many companies include arbitration provisions in their contracts with their customers, employees and franchisees. Most of these provisions, which benefit customers and businesses alike, require that arbitration be conducted on an individual basis, expressly precluding arbitrators from conducting class arbitrations. The plaintiffs’ class action bar has successfully contravened the policy of the Federal Arbitration Act (FAA), which favors enforcement of arbitration agreements, by attacking class waivers under state law.

In AT&T Mobility v. Concepcion (No. 09-893), however, the United States Supreme Court held on April 27, 2011 that the FAA preempts state-law rules that stand as an obstacle to the accomplishment of the FAA’s objectives, requiring the cases involved to be arbitrated individually as opposed to in a class-wide arbitration. The 5-4 decision written by Justice Scalia, is an important victory for anyone opposing class-wide arbitrations.