Employment Arbitration Programs

The Courts' Views

The vast majority of courts have determined that the right to assert a collective action under the FLSA can be abrogated by an arbitration agreement, as can the right to bring class claims under other federal statutes. See, e.g., Vilches v. The Travelers Companies, Inc., 413 F. App'x 487, 493 (3d Cir. 2011); Caley v. Gulfstream Aerospace Corp., 428 F.3d, 1359, 1379 (11th Cir. 2005); Carter v. Countrywide Credit Industries, Inc., 362 F.3d 294, 299 (5th Cir. 2004); Adkins v. Labor Ready, Inc., 303 F.3d 496, 499 (4th Cir. 2002); Horenstein v. Mortgage Market, Inc., 9 F. App'x 618 (9th Cir.2001); Tenet HealthSystem Philadelphia, Inc. v. Rooney, No. 12-mc-58, 2012 WL 3550496 (E.D. Pa. Aug. 17, 2012); Delock v. Securitas Sec. Services USA, Inc., 883 F. Supp. 2d 784, 791 (E.D. Ark. 2012).

However, some courts have held that the right to bring a collective action under the FLSA cannot be waived. In Raniere v. Citigroup Inc., 827 F. Supp.2d 294 (S.D.N.Y. 2011), a district court blocked Citigroup from enforcing an arbitration agreement containing a collective action waiver, holding that “a waiver of the right to proceed collectively under the FLSA is unenforceable as a matter of law in accordance with the Gilmer Court's recognition that '[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute.'” Id. at 314. This case is on appeal to the Second Circuit and was argued to the court on March 20, 2013. Other courts have recognized the issue as an undecided one, but declined to address it. See Skirchak v. Dynamics Research Corp., 508 F.3d 49, 62 (1st Cir. 2007) (“We do not need to decide if class actions under the FLSA may ever be waived by agreement …. .”).

Despite this weight of authority and the Supreme Court's recent decisions favorable to arbitration, the National Labor Relations Board held that an employer violates the National Labor Relations Act “when it requires employees covered by the Act, as a condition of their employment, to sign an agreement that precludes them from filing or joining class, or collective claims addressing their wages, hours or other working conditions against the employer in any forum, arbitral or judicial.” D.R. Horton, Inc., 357 NLRB No. 184 at 1 (NLRB Jan. 2012). According to the Board, “such an agreement unlawfully restricts employees' Section 7 right to engage in concerted action for mutual aid or protection, notwithstanding the Federal Arbitration Act (FAA), which generally makes employment-related arbitration agreements judicially enforceable.” Id. The decision ' which arose in the context of an employee's attempt to assert a collective action under the FLSA ' is currently on appeal to the United States Court of Appeals for the Fifth Circuit. D.R. Horton, No. 12-60031 (5th Cir. filed Jan. 13, 2012). The Fifth Circuit heard oral argument in this case on Feb. 5, 2013.

To date, only one federal appellate court has explicitly considered D.R. Horton. The Eighth Circuit issued a decision both factually limiting and refusing to follow D.R. Horton. Owen v. Bristol Care, Inc., 702 F.3d 1050, 1053-55 (8th Cir. 2013). Owen concerned Sharon Owen, a former administrator for Bristol Care, who sought relief on behalf of herself and similarly situated employees for alleged misclassifications of employees. Id. at 1051. The district court denied the company's motion to compel arbitration of her claims pursuant to a mandatory arbitration agreement that precluded class claims. Id. at 1052. The district court determined that Concepcion (AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740, 1745 (2011), discussed in Part One of this article) was not binding on arbitration claims in the employment context, and cited D.R. Horton to find class waivers invalid in FLSA cases. Id.

On appeal, the Eighth Circuit reversed, explaining that the FAA requires courts to enforce arbitration agreements according to their own terms, and rejected arguments that the FLSA somehow prevents enforcement of arbitration agreements which mandate proceeding with individual claims. Id. at 1053. The Eighth Circuit found that D.R. Horton carried limited “persuasive authority,” and could be limited to arbitration agreements that bar all protected concerted action. Id. The Eighth Circuit further explained that D.R. Horton is inapplicable where the arbitration agreement permits filing complaints with administrative agencies. Id. at 1054.

With limited exceptions, the vast majority of district courts considering the issue have found that D.R. Horton is inconsistent with Concepcion. See, e.g., Miguel v. J.P. Morgan Chase Bank, N.A., No. 12-cv-3308, 2013 WL 452418 (C.D. Cal Feb. 5 2013) (refusing to provide defer to the NLRB's D.R. Horton decision); Andrus v. D.R. Horton, Inc., 12-cv-00098, 2012 WL 5989646, *10 (D. Nev. Nov. 5, 2012) (granting motion to compel arbitration of misclassification claim under the FLSA despite class waiver); Carey v. 24 Hour Fitness USA, Inc., Civil Action No. H'10'3009, 2012 WL 4754726, *2 (S.D.Tex. Oct. 4, 2012) (declining to apply the D.R. Horton decision); Tenet, 2013 WL 3550496, at *3 (E.D. Pa. Aug. 17, 2012) (granting motion to confirm arbitration over employee's D.R. Horton argument); Delock, 2012 WL 3150391 at ** 5, 7-8 (declining to follow D.R. Horton and enforcing motion to compel individual arbitration of a collective claim brought under the FLSA, but also granting plaintiff's request to file an interlocutory appeal on the issue.); Morvant v. P.F. Chang's China Bistro, 870 F. Supp. 2d 831, 843 (N.D. Cal. 2012) (granting motion to compel individual arbitration of asserted class claim brought in the employment context, indicating that the arbitration provision is not unenforceable after D.R. Horton); LaVoice v. UBD Financial Services, No. 11-cv-2308, 2012 WL 124590, *6, *9 (S.D.N.Y. Jan. 13, 2012) (granting motion to compel individual arbitration of an employee's FLSA claim, and refusing to follow D.R. Horton); see also, Brown v. Trueblue, Inc., 10-cv-0514, 2012 WL 1268644 (M.D. Pa. April 16, 2012) (denying plaintiff's motion to reconsider the granting of a motion to compel collective wage and hour claim through individual arbitration on the basis that D.R. Horton made the arbitration agreement “void.”).

There have, however, been a small number of trial court decisions invalidating arbitration agreements in reliance on D.R. Horton to invalidate arbitration agreements. See Herrington v. Waterstone Mortg. Corp., 11-cv-779, 2012 WL 1242318, *6 (W.D. Wis. March 16, 2012) (following D.R. Horton and invalidating a collective action waiver in an arbitration agreement as applied to an FLSA claim).

The Supreme Court recently provided some guidance in this area in American Express Co. v. Italian Colors Restaurant, No. 12-133 (June 20, 2013).

In American Express, the Court rejected an antitrust challenge by small business owners to enforcement of a class action waiver between those businesses and American Express. According to the business owners, the class waiver was unenforceable because the value of each businesses' claims were small and precluding businesses from proceeding as a class imposed “prohibitive costs” that frustrated enforcement of federal antitrust laws. In a 5-4 decision authored by Justice Scalia, the Court sided with American Express, holding that because “the antitrust laws do not guarantee an affordable procedural path to vindication of every claim,” there was no basis for refusing to honor the FAA's directive that arbitration agreements be enforced on the same basis as other contracts.' Enforcement of the class waiver did not preclude the business owners from “effectively vindicating” their statutory rights because the waiver did not eliminate the businesses “right to pursue” their claims under the antitrust laws. While American Express does not address the FLSA or other federal employment laws, the principle it reflects, namely that arbitration agreements are to be enforced on their clear terms, likely applies equally to challenges to class waivers in the employment context.

Class Action Waivers and Pattern-or-Practice Claims

In Parisi v. Goldman Sach & Co., No. 11-5229, 2013 WL 1149751 (2d Cir. March 21, 2013), the Second Circuit held that an employee's Title VII rights are not violated by requiring her to arbitrate a Title VII claim on an individual basis, even if that effectively prevents her from pursuing a “pattern-of-practice” theory of discrimination. Id. at *3.

In the case, Lisa Parisi and two other female former employees of Goldman Sachs alleged that the company engaged in “a continuing pattern and practice of discrimination based on sex against female Managing Directors, Vice Presidents and Associates with respect to compensation, business allocations, promotions and other terms and conditions” of employment, in violation of Title VII of the Civil Rights Act of 1964 and New York City law.

Goldman Sachs requested that the case be remanded to arbitration in accordance with Parisi's Managing Director Agreement. Further, Parisi should be compelled to arbitrate her claims individually, rather than on a class-wide basis, because the Managing Director Agreement was silent as to the permissibility of class arbitration and, under the Supreme Court's holding in Stolt-Nielsen S.A. v. Animal Feeds International Corp., 130 S.Ct. 1758 (2010), a party cannot be compelled to participate in a class-wide arbitration absent an express agreement to do so. Parisi responded that the arbitration agreement should not be enforced because, in signing it, she “did not understand it to require a ban on class claims, nor did she waive her substantive right to challenge systemic discrimination at Goldman Sachs.”

The district court held that, while the arbitration clause was generally valid, it could not be interpreted to compel individual arbitration of Parisi's pattern-or-practice claim because to do so “would make it impossible for Parisi to arbitrate a Title VII pattern-or-practice claim, and ' consequently, the clause effectively operated as a waiver of a substantive right under Title VII.” Accordingly, the district court denied Goldman Sachs's motion to compel arbitration. The Court of Appeals reversed and ordered that Parisi be compelled to arbitrate her claims.

According to the Second Circuit, “there is no substantive statutory right to pursue a pattern-or-practice claim.” Thus, enforcing Goldman Sachs's agreement did not run afoul of the Supreme Court's conclusion that employees cannot be required in an employment agreement to forfeit substantive statutory rights. Instead, “in Title VII jurisprudence, 'pattern-or-practice' simply refers to a method of proof [of intentional discrimination] and does not constitute a 'freestanding cause of action.'” Further, “since private plaintiffs do not have a right to bring a pattern-or-practice claim of discrimination, there can be no entitlement to the ancillary class action procedural mechanism.”

Silence Concerning Class Arbitration

Another query in the class action context is whether an employer may be compelled to participate in class arbitration, if a contract that provides for mandatory arbitration is silent on the issue of class procedures. The Supreme Court was presented with this precise question in the commercial context in 2010, and determined that a pre-dispute arbitration agreement that was silent on the issue of class procedures could not be interpreted to allow class-wide arbitration. Stolt-Nielsen S.A., supra, 559 U.S. at 1775.

A circuit split has developed in the wake of Stolt-Neilsen, with the Fifth Circuit deciding that arbitrators should not find implied agreements to submit to class arbitration where the clause is silent on the topic, while the Second and Third Circuits have found that an arbitrator can permit classwide arbitration based on a determination that the parties implicitly agreed to the procedure. See Reed v. Florida Metro. Univ., Inc., 681 F.3d 630, 644 (5th Cir. 2012); Sutter v. Oxford Health Plans LLC, 675 F.3d 215, 222 (3d Cir. 2012), as amended (Apr. 4, 2012), cert. granted, 133 S. Ct. 786, 184 L. Ed. 2d 526 (U.S. 2012); Jock v. Sterling Jewelers Inc., 646 F.3d 113, 124 (2d Cir. 2011) (holding that an arbitrator did not exceed her powers by ruling that class arbitration was allowed under an agreement lacking an express class provision).

In Oxford Health Plans LLC v. Sutter, No. 12-135 (June 10, 2013), the Court side-stepped the question of whether an employer may be compelled to participate in class arbitration when the arbitration provision is silent on that issue. Oxford Health requested that the Court reverse an arbitrator's decision to permit class arbitration because the arbitration provision did not provide any basis for concluding that the parties' agreed to class arbitration. The Court declined this request. Without commenting on the meaning of silence for arbitration purposes, it unanimously upheld the arbitrator's decision emphasizing that the scope of judicial review of an arbitrator's decision is extremely narrow; specifically, the FAA “permits courts to vacate an arbitral decision only when the arbitrator strayed from his delegated task of interpreting a contract, not when he [or she] performed that task poorly.” In this case, because the arbitrator's conclusion that the arbitration clause permitted arbitration of class claims constituted an interpretation of the parties' agreement, the Court could not vacate that decision regardless of arguments that the arbitrator committed error or serious error.

Conclusion

Although litigants have raised many challenges to the enforceability of mandatory arbitration programs precluding class or collective actions, most courts have determined that, after Concepcion, these provisions must be enforced in accordance with their clear terms.

Alan D. Berkowitz is a Partner at Dechert LLP and chair of its labor and employment practice, in the firm's Philadelphia office. J. Ian Downes is Counsel,' and Jennifer L. Burdick is an Associate in the same office.

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Last month, we discussed the fact that the enforcement of arbitration agreements in the employment and other contexts has been a source of continuing litigation. Part One of this article explored recent developments in the arbitration context, particularly those involving class or collective action issues, and highlighted a number of significant unsettled issues that may soon be decided. The discussion concludes herein.

Class Waivers, the FLSA and D.R. Horton

There remains some uncertainty concerning the enforceability of arbitration agreements precluding class or collective actions, particularly with respect to claims under the Fair Labor Standards Act (FLSA).

The Courts' Views

The vast majority of courts have determined that the right to assert a collective action under the FLSA can be abrogated by an arbitration agreement, as can the right to bring class claims under other federal statutes. See, e.g., Vilches v. The Travelers Companies, Inc. , 413 F. App'x 487, 493 (3d Cir. 2011); Caley v. Gulfstream Aerospace Corp., 428 F.3d, 1359, 1379 (11th Cir. 2005); Carter v. Countrywide Credit Industries, Inc. , 362 F.3d 294, 299 (5th Cir. 2004); Adkins v. Labor Ready, Inc. , 303 F.3d 496, 499 (4th Cir. 2002); Horenstein v. Mortgage Market, Inc. , 9 F. App'x 618 (9th Cir.2001); Tenet HealthSystem Philadelphia, Inc. v. Rooney, No. 12-mc-58, 2012 WL 3550496 (E.D. Pa. Aug. 17, 2012); Delock v. Securitas Sec. Services USA, Inc ., 883 F. Supp. 2d 784, 791 (E.D. Ark. 2012).

However, some courts have held that the right to bring a collective action under the FLSA cannot be waived. In Raniere v. Citigroup Inc. , 827 F. Supp.2d 294 (S.D.N.Y. 2011), a district court blocked Citigroup from enforcing an arbitration agreement containing a collective action waiver, holding that “a waiver of the right to proceed collectively under the FLSA is unenforceable as a matter of law in accordance with the Gilmer Court's recognition that '[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive rights afforded by the statute.'” Id . at 314. This case is on appeal to the Second Circuit and was argued to the court on March 20, 2013. Other courts have recognized the issue as an undecided one, but declined to address it. See Skirchak v. Dynamics Research Corp. , 508 F.3d 49, 62 (1st Cir. 2007) (“We do not need to decide if class actions under the FLSA may ever be waived by agreement …. .”).

Despite this weight of authority and the Supreme Court's recent decisions favorable to arbitration, the National Labor Relations Board held that an employer violates the National Labor Relations Act “when it requires employees covered by the Act, as a condition of their employment, to sign an agreement that precludes them from filing or joining class, or collective claims addressing their wages, hours or other working conditions against the employer in any forum, arbitral or judicial.” D.R. Horton, Inc., 357 NLRB No. 184 at 1 (NLRB Jan. 2012). According to the Board, “such an agreement unlawfully restricts employees' Section 7 right to engage in concerted action for mutual aid or protection, notwithstanding the Federal Arbitration Act (FAA), which generally makes employment-related arbitration agreements judicially enforceable.” Id. The decision ' which arose in the context of an employee's attempt to assert a collective action under the FLSA ' is currently on appeal to the United States Court of Appeals for the Fifth Circuit. D.R. Horton, No. 12-60031 (5th Cir. filed Jan. 13, 2012). The Fifth Circuit heard oral argument in this case on Feb. 5, 2013.

To date, only one federal appellate court has explicitly considered D.R. Horton . The Eighth Circuit issued a decision both factually limiting and refusing to follow D.R. Horton . Owen v. Bristol Care, Inc. , 702 F.3d 1050, 1053-55 (8th Cir. 2013). Owen concerned Sharon Owen, a former administrator for Bristol Care, who sought relief on behalf of herself and similarly situated employees for alleged misclassifications of employees. Id. at 1051. The district court denied the company's motion to compel arbitration of her claims pursuant to a mandatory arbitration agreement that precluded class claims. Id. at 1052. The district court determined that Concepcion ( AT&T Mobility LLC v. Concepcion , 131 S. Ct. 1740, 1745 (2011), discussed in Part One of this article) was not binding on arbitration claims in the employment context, and cited D.R. Horton to find class waivers invalid in FLSA cases. Id.

On appeal, the Eighth Circuit reversed, explaining that the FAA requires courts to enforce arbitration agreements according to their own terms, and rejected arguments that the FLSA somehow prevents enforcement of arbitration agreements which mandate proceeding with individual claims. Id. at 1053. The Eighth Circuit found that D.R. Horton carried limited “persuasive authority,” and could be limited to arbitration agreements that bar all protected concerted action. Id. The Eighth Circuit further explained that D.R. Horton is inapplicable where the arbitration agreement permits filing complaints with administrative agencies. Id. at 1054.

With limited exceptions, the vast majority of district courts considering the issue have found that D.R. Horton is inconsistent with Concepcion. See, e.g., Miguel v. J.P. Morgan Chase Bank, N.A., No. 12-cv-3308, 2013 WL 452418 (C.D. Cal Feb. 5 2013) (refusing to provide defer to the NLRB's D.R. Horton decision); Andrus v. D.R. Horton, Inc., 12-cv-00098, 2012 WL 5989646, *10 (D. Nev. Nov. 5, 2012) (granting motion to compel arbitration of misclassification claim under the FLSA despite class waiver); Carey v. 24 Hour Fitness USA, Inc., Civil Action No. H'10'3009, 2012 WL 4754726, *2 (S.D.Tex. Oct. 4, 2012) (declining to apply the D.R. Horton decision); Tenet, 2013 WL 3550496, at *3 (E.D. Pa. Aug. 17, 2012) (granting motion to confirm arbitration over employee's D.R. Horton argument); Delock, 2012 WL 3150391 at ** 5, 7-8 (declining to follow D.R. Horton and enforcing motion to compel individual arbitration of a collective claim brought under the FLSA, but also granting plaintiff's request to file an interlocutory appeal on the issue.); Morvant v. P.F. Chang's China Bistro , 870 F. Supp. 2d 831, 843 (N.D. Cal. 2012) (granting motion to compel individual arbitration of asserted class claim brought in the employment context, indicating that the arbitration provision is not unenforceable after D.R. Horton); LaVoice v. UBD Financial Services, No. 11-cv-2308, 2012 WL 124590, *6, *9 (S.D.N.Y. Jan. 13, 2012) (granting motion to compel individual arbitration of an employee's FLSA claim, and refusing to follow D.R. Horton); see also, Brown v. Trueblue, Inc., 10-cv-0514, 2012 WL 1268644 (M.D. Pa. April 16, 2012) (denying plaintiff's motion to reconsider the granting of a motion to compel collective wage and hour claim through individual arbitration on the basis that D.R. Horton made the arbitration agreement “void.”).

There have, however, been a small number of trial court decisions invalidating arbitration agreements in reliance on D.R. Horton to invalidate arbitration agreements. See Herrington v. Waterstone Mortg. Corp., 11-cv-779, 2012 WL 1242318, *6 (W.D. Wis. March 16, 2012) (following D.R. Horton and invalidating a collective action waiver in an arbitration agreement as applied to an FLSA claim).

The Supreme Court recently provided some guidance in this area in American Express Co. v. Italian Colors Restaurant, No. 12-133 (June 20, 2013).

In American Express, the Court rejected an antitrust challenge by small business owners to enforcement of a class action waiver between those businesses and American Express. According to the business owners, the class waiver was unenforceable because the value of each businesses' claims were small and precluding businesses from proceeding as a class imposed “prohibitive costs” that frustrated enforcement of federal antitrust laws. In a 5-4 decision authored by Justice Scalia, the Court sided with American Express, holding that because “the antitrust laws do not guarantee an affordable procedural path to vindication of every claim,” there was no basis for refusing to honor the FAA's directive that arbitration agreements be enforced on the same basis as other contracts.' Enforcement of the class waiver did not preclude the business owners from “effectively vindicating” their statutory rights because the waiver did not eliminate the businesses “right to pursue” their claims under the antitrust laws. While American Express does not address the FLSA or other federal employment laws, the principle it reflects, namely that arbitration agreements are to be enforced on their clear terms, likely applies equally to challenges to class waivers in the employment context.

Class Action Waivers and Pattern-or-Practice Claims

In Parisi v. Goldman Sach & Co., No. 11-5229, 2013 WL 1149751 (2d Cir. March 21, 2013), the Second Circuit held that an employee's Title VII rights are not violated by requiring her to arbitrate a Title VII claim on an individual basis, even if that effectively prevents her from pursuing a “pattern-of-practice” theory of discrimination. Id. at *3.

In the case, Lisa Parisi and two other female former employees of Goldman Sachs alleged that the company engaged in “a continuing pattern and practice of discrimination based on sex against female Managing Directors, Vice Presidents and Associates with respect to compensation, business allocations, promotions and other terms and conditions” of employment, in violation of Title VII of the Civil Rights Act of 1964 and New York City law.

Goldman Sachs requested that the case be remanded to arbitration in accordance with Parisi's Managing Director Agreement. Further, Parisi should be compelled to arbitrate her claims individually, rather than on a class-wide basis, because the Managing Director Agreement was silent as to the permissibility of class arbitration and, under the Supreme Court's holding in Stolt-Nielsen S.A. v. Animal Feeds International Corp. , 130 S.Ct. 1758 (2010), a party cannot be compelled to participate in a class-wide arbitration absent an express agreement to do so. Parisi responded that the arbitration agreement should not be enforced because, in signing it, she “did not understand it to require a ban on class claims, nor did she waive her substantive right to challenge systemic discrimination at Goldman Sachs.”

The district court held that, while the arbitration clause was generally valid, it could not be interpreted to compel individual arbitration of Parisi's pattern-or-practice claim because to do so “would make it impossible for Parisi to arbitrate a Title VII pattern-or-practice claim, and ' consequently, the clause effectively operated as a waiver of a substantive right under Title VII.” Accordingly, the district court denied Goldman Sachs's motion to compel arbitration. The Court of Appeals reversed and ordered that Parisi be compelled to arbitrate her claims.

According to the Second Circuit, “there is no substantive statutory right to pursue a pattern-or-practice claim.” Thus, enforcing Goldman Sachs's agreement did not run afoul of the Supreme Court's conclusion that employees cannot be required in an employment agreement to forfeit substantive statutory rights. Instead, “in Title VII jurisprudence, 'pattern-or-practice' simply refers to a method of proof [of intentional discrimination] and does not constitute a 'freestanding cause of action.'” Further, “since private plaintiffs do not have a right to bring a pattern-or-practice claim of discrimination, there can be no entitlement to the ancillary class action procedural mechanism.”

Silence Concerning Class Arbitration

Another query in the class action context is whether an employer may be compelled to participate in class arbitration, if a contract that provides for mandatory arbitration is silent on the issue of class procedures. The Supreme Court was presented with this precise question in the commercial context in 2010, and determined that a pre-dispute arbitration agreement that was silent on the issue of class procedures could not be interpreted to allow class-wide arbitration. Stolt-Nielsen S.A., supra, 559 U.S. at 1775.

A circuit split has developed in the wake of Stolt-Neilsen, with the Fifth Circuit deciding that arbitrators should not find implied agreements to submit to class arbitration where the clause is silent on the topic, while the Second and Third Circuits have found that an arbitrator can permit classwide arbitration based on a determination that the parties implicitly agreed to the procedure. See Reed v. Florida Metro. Univ., Inc. , 681 F.3d 630, 644 (5th Cir. 2012); Sutter v. Oxford Health Plans LLC , 675 F.3d 215, 222 (3d Cir. 2012), as amended (Apr. 4, 2012), cert. granted, 133 S. Ct. 786, 184 L. Ed. 2d 526 (U.S. 2012); Jock v. Sterling Jewelers Inc ., 646 F.3d 113, 124 (2d Cir. 2011) (holding that an arbitrator did not exceed her powers by ruling that class arbitration was allowed under an agreement lacking an express class provision).

In Oxford Health Plans LLC v. Sutter, No. 12-135 (June 10, 2013), the Court side-stepped the question of whether an employer may be compelled to participate in class arbitration when the arbitration provision is silent on that issue. Oxford Health requested that the Court reverse an arbitrator's decision to permit class arbitration because the arbitration provision did not provide any basis for concluding that the parties' agreed to class arbitration. The Court declined this request. Without commenting on the meaning of silence for arbitration purposes, it unanimously upheld the arbitrator's decision emphasizing that the scope of judicial review of an arbitrator's decision is extremely narrow; specifically, the FAA “permits courts to vacate an arbitral decision only when the arbitrator strayed from his delegated task of interpreting a contract, not when he [or she] performed that task poorly.” In this case, because the arbitrator's conclusion that the arbitration clause permitted arbitration of class claims constituted an interpretation of the parties' agreement, the Court could not vacate that decision regardless of arguments that the arbitrator committed error or serious error.

Conclusion

Although litigants have raised many challenges to the enforceability of mandatory arbitration programs precluding class or collective actions, most courts have determined that, after Concepcion, these provisions must be enforced in accordance with their clear terms.

Alan D. Berkowitz is a Partner at Dechert LLP and chair of its labor and employment practice, in the firm's Philadelphia office. J. Ian Downes is Counsel,' and Jennifer L. Burdick is an Associate in the same office.

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