Mandatory arbitration clauses have proven to be very powerful weapons employed by businesses to avoid the duration, expense, and often times negative publicity associated with protracted litigation in both federal and state courts across the country. Carefully drafted arbitration clauses have also protected businesses from class actions which, when certified, can frequently mean the difference between a $100 versus a $100 million verdict.
Over the past few decades, there has been a clear judicial penchant towards the enforcement of arbitration clauses, particularly given the strong pro-arbitration policy under the Federal Arbitration Act. See, e.g., AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011); American Express Co. v. Italian Colors Restaurant, 133 S. Ct. 2304 (2013). When an arbitration clause might apply, it is important to raise it as soon as possible in response to litigation to avoid a finding that the right to compel arbitration has been waived.
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