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March 07, 2017 Practice Points

DOL Regulation Prohibiting Class Action Waivers Upheld

By Merril Hirsh

On February 8, 2017, Chief Judge Barbara Lynn of the N.D. Texas entered an order granting summary judgment in favor of the Department of Labor and denying summary judgment for the Chamber of Commerce and other plaintiffs in a lawsuit challenging Labor Department regulations concerning fiduciary standards for financial professionals who provide advice in connection with ERISA.  In one issue (discussed at the very end of the order), Judge Lynn upheld the portion of DOL regulations that had barred companies from insisting on class action waivers in arbitration agreements.  The court found that the regulation did not prohibit arbitrations and did not violate the FAA.

The regulation itself could be short lived as the DOJ filed a motion seeking to stay the case while the new administration reconsiders the regulation.

Keywords: litigation, alternative dispute resolution, Department of Labor regulations, class action waivers, FAA

Merril Hirsh is a partner at Troutman Sanders in Washington, D.C.

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