Supreme Court Rules Against Consumers in High Stakes Arbitration Decision

By Martin & Jones on April 27, 2011

In a much-anticipated decision, the United States Supreme Court ruled against consumers in AT&T v. Concepcion. In a 5-4 decision, the Supreme Court held that corporations may use arbitration clauses to cut off consumers and employees’ right to join their claims together through class actions to hold corporations accountable. The decision clears the way for employers and corporations to include in all employment and consumer agreements an arbitration clause which prohibits class action or even joinder of claims.

As a result, consumers and employees harmed by unfair trade practices or other wrongful conduct will have to pursue their claims through individual arbitration proceedings. Since individuals will no longer be able to join together and pool their resources in challenging systematic and widespread misconduct, many instances of wrongful conduct will go unchallenged. The Supreme Court’s decision is a crushing blow to consumers.

The decision has been widely criticized by consumer activists and consumer groups. Read the Public Citizen’s press release.