Class action arbitration is such a departure from ordinary, bilateral arbitration of individual disputes that courts may compel class action arbitration only where the parties expressly declare their intention to be bound by such actions in their arbitration agreement, the U.S. Supreme Court has ruled in a 5-4 decision. Lamps Plus, Inc. v. Varela, No. 17-988 (Apr. 24, 2019). “Courts may not infer from an ambiguous agreement that parties have consented to arbitrate on a classwide basis,” held the Court.
As with last year’s holding in Epic Systems Corp. v. Lewis (discussed here), in which the Court upheld the validity of class and collective action waivers in arbitration agreements, today’s ruling provides further protection for employers intending to resolve employment-related disputes on an individual basis.
A full discussion of the Varela case and the Court’s holding may be found on the Jackson Lewis website, here.