Ari Stiller Publishes Article About Arbitration in L.A. Daily Journal

The U.S. Supreme Court has answered a lot of questions about arbitration recently. We now know that, in many circumstances, employers can require employees to sign take-it-or-leave-it agreements that waive the right to a jury trial and to bring a class action. Businesses can do the same for consumers who buy their products.

Ari Stiller recently penned an article in the Los Angeles Daily Journal about one arbitration question that remains unanswered: whether there are limits to what an arbitration agreement can waive. The article, entitled, “Participation Waivers Test Federal Arbitration Act’s Limits,” argues that arbitration agreements should not be able to extinguish the right of class members to participate in a case that is already pending in court.

The Federal Arbitration Act governs contracts to “submit to arbitration” or “settle by arbitration” some controversy between the parties. (9 U.S.C. § 2.) It does not protect a waiver of the right to participate in an action once the venue and procedural rules have been determined. The FAA was not intended to give cover to parties waiving non-arbitration-related rights simply because those waivers are contained in a document that also discusses arbitration. (See Rebolledo v. Tilly’s, Inc. (2014) 228 Cal.App.4th 900, 912.)

Ari’s article argues that restricting “participation waivers” will improve access to justice. Many wage and hour and consumer claims involve small losses suffered by a large number of people. Any one person’s claim is often too small to bring on its own. As a practical matter, a class action may be the only hope for recovery. If a class case is allowed to proceed in court, the Federal Arbitration Act should not prevent non-party class members from recovering for their losses.

The California Mediation and Arbitration Blog marked Ari’s article as “Recommended Reading.”