Arbitration: High Court Rules That Class-Wide Arbitration May Be Available-Even If Arbitration Agreement Doesn’t Say So

When an arbitration agreement is silent about whether class actions are permitted, it is up to an arbitrator to interpret the agreement to decide whether a claim can go forward as a class action, according to a new U.S. Supreme Court ruling.Although the mandatory arbitration agreement in this case involved a home loan, the high court’s ruling probably also applies to arbitration agreements in the employment setting. The decision does not address whether arbitration is an appropriate way to resolve class disputes.While the courts—and arbitrators—continue to grapple with these issues, employers who use mandatory arbitration agreements for employment disputes should consider whether to include language about coverage of class-wide disputes. The Supreme Court suggested wording similar to the following might be clear enough to preclude class actions: “Disputes shall be resolved by an arbitrator [selected by employer] to arbitrate this dispute and no other (even identical) dispute with another individual.” In the case the court heard, the following language was unclear about whether class claims were permitted: Disputes “shall be resolved &133; by one arbitrator selected by us [Green Tree] with consent of you [Green Tree’s customer].”We’ll keep you posted as this area of the law continues to develop.