In a consumer products case that will likely have a significant impact on employers and employees who enter into arbitration agreements, the U.S. Supreme Court ruled last Wednesday, April 27, 2011, that the Federal Arbitration Act preempts states from prohibiting enforcement of arbitration agreements that bar arbitration of class action disputes (AT&T Mobility LLC v. Concepcion, Docket No. 09-893, April 27, 2011). In a divided decision, the Court reversed a Ninth Circuit Court of Appeals decision that a class action arbitration waiver in AT&Ts wireless service agreement was unconscionable and unenforceable under California state law.
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