The Federal Arbitration Act and Class Action Waivers (CRS Report for Congress)
| Release Date |
Sept. 13, 2024 |
| Report Number |
IF12764 |
| Report Type |
In Focus |
| Authors |
Bryan L. Adkins |
| Source Agency |
Congressional Research Service |
Summary:
Arbitration agreements have become ubiquitous and are
used in a wide range of contexts, including business-tobusiness contracts, employment contracts, collective
bargaining agreements, and consumer contracts. For
example, arbitration agreements can be found in contractual
terms of service for credit cards, cell phones, online
retailers, social media platforms, and ridesharing apps, as
well as in warranty terms printed on product packaging.
Arbitration agreements typically waive the parties’ right to
litigate disputes in court and instead require them to submit
disputes to a neutral third party for a binding decision.
These arbitration agreements often contain a provision that
waives each party’s right to bring claims in a class action
lawsuit or class action arbitration, limiting each party to
arbitrating the individual party’s claims.
The Federal Arbitration Act (FAA; 9 U.S.C. §§ 1 et seq.)
generally makes covered arbitration agreements enforceable
in state and federal courts. This In Focus provides
background on arbitration and the FAA, and briefly
examines select Supreme Court decisions that address class
action waivers and the ability to arbitrate on a classwide
basis under the FAA.
