Naked Class Waivers

Tens of millions of workers and consumers have signed contracts with two increasingly common clauses: one forces the individual to arbitrate rather than litigate any and all disputes, and the other waives their right to participate in class action lawsuits.<br><br>The Supreme Court has repeatedly upheld these contracts under the Federal Arbitration Act, reasoning that arbitration agreements should be enforced according to their terms, including those with class waivers. As a result, they have rapidly spread. This phenomenon worsens the access to justice crisis, prevents accountability, deprives the public of oversight, and precludes millions from vindicating their rights. Class action lawsuits are often the only way to pursue small claims that affect many people, and without a group mechanism, legal claims over basic rights violations have been systematically foreclosed. <br><br>Recently, plaintiffs’ lawyers have fought back against these contracts by mass-filing individual arbitration demands. This imposes extraordinary up-front costs on defendants and forces employers and corporations to re-enter the class action arena or else pay millions in administrative fees and costs. This strategy only works because these contracts have two parts—by both prohibiting class actions and requiring individual arbitration, the drafters of these agreements have opened themselves up to mass arbitration. It has been hailed for reversing the trend of mandatory arbitration and, perhaps, reviving the class action. <br><br>But what if arbitration provisions aren’t required for class waivers to be valid? <br><br>Something worse is coming—and in many places, is already here: “Naked Class Waivers” that force individuals to give up their ability to participate in group lawsuits without any accompanying arbitration agreement. This Article is the first to explore the increasing prevalence of these coercive and one-sided agreements. The Federal Arbitration Act has served as a Trojan Horse to smuggle waivers of a key procedural right into mainstream legal acceptance, transforming these once-unconscionable terms into something the courts now uphold. Naked Class Waivers threaten to be even worse for consumers, workers, and the public interest than even mandatory arbitration.<br><br>This is the new frontier of the assault on worker and consumer rights, and it will succeed unless advocates and activists invoke the right strategies to fight back. Doing so will require formal legal reform, creative litigation strategies, and increased action by government agencies. Congress and the states must pass legislation shoring up the class action right, courts should revive and expand upon old legal doctrines deeming class waivers unconscionable, and government actors must recognize this threat for what it is and respond through creative, bold enforcement strategies.