Affirming the broad scope of the Supreme Court of the United States' April 2011 decision in AT&T Mobility LLC v. Concepcion, the U.S. Court of Appeals for the Third Circuit recently rejected a challenge to the validity of an employee arbitration agreement based on Pennsylvania law prohibiting the waiver of class action claims. In Quilloin v. Tenet HealthSystem Philadelphia, Inc., the Third Circuit considered a mandatory arbitration agreement that was ambiguous regarding an employee's right to pursue a class action, either in arbitration or in court. The plaintiff challenged the agreement based, in part, on her assertion that it could be interpreted to bar class action claims, in violation of existing Pennsylvania law. However, in Concepcion, the Supreme Court held that the Federal Arbitration Act ("FAA") preempts state laws prohibiting class action waivers in arbitration agreements. Applying Concepcion, the Third Circuit held that Pennsylvania's prohibition on class action waivers was "egregious" and presented an untenable "obstacle to the fulfillment of the FAA's purposes." The Third Circuit's holding continues a trend in the federal courts to apply Concepcion broadly to foreclose state law challenges to the inclusion of class action waivers in employee arbitration agreements.
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