A federal court in West Virginia has concluded that the arbitration agreement used by AT&T Mobility is valid and enforceable despite the agreement’s ban on class actions.
In deciding Wince v. Easterbrooke Cellular, the court emphasized that, under the AT&T arbitration agreement: (1) AT&T would generally pay all arbitration costs, whether the customer wins or loses; (2) the customer would be entitled to the same remedies in arbitration as in court; and (3) a prevailing customer in an individual arbitration would receive at least $10,000 plus twice his or her attorneys’ fees if the arbitrator were to award more than AT&T's last settlement offer.
Although a number of courts applying California unconscionability law have rejected the AT&T arbitration agreement (See, e.g., AT&T Mobility v. Concepcion, 584 F.3d 849 (9th Cir. 2009), petition for cert. filed.), other courts have approved the agreement. (See, e.g., Francis v. AT&T Mobility, LLC, Case No. 07-CV-14921, 2009 WL 416063 (E.D. Mich. Feb. 18, 2009).) Wince suggests that well-drafted arbitration agreements remain enforceable in most jurisdictions and shows the importance of keeping these agreements state of the art and consumer friendly.
We generally include variants of the AT&T provisions discussed in Wince in the arbitration provisions we recommend to our clients. We also recommend that our clients include provisions that give their customers the right to opt out of arbitration or, better yet, give customers an up-front opportunity to accept or reject arbitration and an incentive for accepting it. In jurisdictions most hostile to arbitration, we recommend that companies consider a currently untested option—allowing customers subject to arbitration to participate in classwide arbitration but only on an opt-in basis. Even in California, arbitration agreements of this type should be enforced.