May 26, 2020 Articles

One Class-Wide Arbitration Versus Thousands of Individual Arbitrations

Two companies were confronted with invoices totaling millions of dollars in fees and costs when workers simultaneously filed thousands of individual arbitration demands.

By P. Jean Baker

Each year thousands, if not millions, of contracts containing arbitration clauses are executed in the United States. The duration of many of these contracts extends far into the future. Since 2018, many of these clauses prohibit class-wide or collective action in arbitration. Evolving Supreme Court decisions regarding the availability of class-wide arbitration and the enforcement of class or collective action waivers have resulted in consequences that were probably not anticipated by the parties when the contracts were drafted.

Since 2003, the Supreme Court has issued a number of decisions regarding the availability of class-wide arbitration and enforcement of class action waivers. Recently, two companies—DoorDash and Postmates—were confronted with invoices totaling millions of dollars in fees and costs when workers simultaneously filed thousands of individual arbitration demands. To date, neither company has succeeded in legally avoiding the class-wide waivers they inserted in their employment agreements.

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