The U.S. Supreme Court has held that the Federal Arbitration Act (FAA) does not authorize arbitrators to impose class arbitration on parties to a dispute when the arbitration agreement itself is silent on the matter. In Stolt-Nielsen SA v. AnimalFeeds International Corp. (pdf) the Court found that an arbitration panel exceeded its powers under the FAA by permitting class arbitration on public policy grounds instead of identifying and applying an appropriate rule of law applicable to the situation. The Court reasoned that parties cannot be compelled to submit to class arbitration unless they have contractually agreed to do so.

For more information on this decision and its implications for employment agreements with arbitration provisions, see Littler’s ASAP: Supreme Court Rules Class Action Arbitrations Impermissible Absent Express Agreement by Henry D. Lederman.