November 21, 2011 Articles

Consumer Protection and Employment Cases after Concepcion

Class-action prohibitions in arbitration clauses have become commonplace not only in consumer agreements but also in the employment context.

By Kirsten Scott and Nicole D. Reynolds

In April 2011, the U.S. Supreme Court issued an opinion of such potential breadth that commentators immediately posed the question, “Has the Supreme Court killed the class action?” The case, AT&T Mobility, LLC v. Concepcion, 131 S. Ct. 1740 (2011), involved AT&T Mobility’s allegedly false advertising that it would provide customers with “free” phones when it in fact charged a sales tax of approximately $30 on each phone. Like many companies providing services and products to consumers, AT&T Mobility inserts in its customer agreements an arbitration clause prohibiting customers from suing it in court. More significantly, the arbitration clause forbids customers from bringing claims against the company as part of a class action. The issue presented in Concepcion was whether AT&T Mobility’s arbitration clause, with its class-action prohibition, was enforceable.

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