What is a class action waiver clause?

A provision in which a party agrees to bring any claim only individually, giving up the right to file or join a class, collective, or representative action. It is almost always part of an arbitration agreement.

Are class action waivers enforceable?

Generally yes when they are paired with an arbitration agreement under the Federal Arbitration Act. The Supreme Court upheld them for consumer contracts in AT&T Mobility v. Concepcion and for employment in Epic Systems v. Lewis. California PAGA claims require separate analysis: after Viking River Cruises v. Moriana (2022), individual PAGA claims can be sent to arbitration, but under Adolph v. Uber (2023), an employee retains standing to pursue representative PAGA claims in court regardless.

What is the difference between a class action waiver and an arbitration clause?

An arbitration clause sends disputes to a private arbitrator instead of court. A class action waiver says any such dispute can only be brought individually. They usually appear together, and the waiver depends on the arbitration clause for its enforceability.

Can you waive class actions in an employment contract?

Yes. In Epic Systems v. Lewis the Supreme Court held that class and collective action waivers in employment arbitration agreements are enforceable, and that the National Labor Relations Act does not override the Federal Arbitration Act.

What is a PAGA carve-out?

California's Private Attorneys General Act lets an employee sue on behalf of the state for labor violations. After Viking River Cruises, Inc. v. Moriana, 596 U.S. 639 (2022), individual PAGA claims can be compelled to arbitration. The California Supreme Court's follow-up in Adolph v. Uber Technologies, Inc., 14 Cal. 5th 1104 (2023), clarified that an employee retains standing to pursue non-individual representative PAGA claims in court even after their individual claim is sent to arbitration. California arbitration agreements therefore typically carve out representative PAGA actions.

Does a class action waiver stop me from filing with a government agency?

No. A class action waiver cannot bar you from filing a charge or complaint with agencies such as the NLRB, the EEOC, or a state labor board, even though it may limit how a resulting dispute is litigated.

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Clauses

Class Action Waiver Clause

A provision in which a party gives up the right to bring or join a class or collective action, agreeing to pursue any claim only on an individual basis.

Reviewed by

GC AI Solutions Team

•

Updated

June 2026

Definition

A class action waiver is a provision in which a party gives up the right to bring or join a class, collective, or representative lawsuit, agreeing to pursue any claim only individually. It almost always rides inside an arbitration clause, where it channels disputes into one-on-one arbitration instead of aggregate litigation. Courts generally enforce these waivers when they are paired with arbitration under the Federal Arbitration Act, including in employment agreements, though California PAGA claims require special handling. After Viking River Cruises, Inc. v. Moriana (2022), individual PAGA claims can be compelled to arbitration; but under the California Supreme Court's follow-up in Adolph v. Uber Technologies, Inc. (2023), an employee retains standing to pursue non-individual representative PAGA claims in court even after the individual claim is sent to arbitration. The waiver is what makes arbitration attractive to a company facing many similar small claims.

Requires each party to bring covered claims only in an individual capacity, keeping class, collective, and representative actions off the table
Almost always sits inside an arbitration clause, which is what makes it enforceable under the FAA
Strips the arbitrator of authority to consolidate or join other people's claims
Carves out claims that cannot be waived, such as California PAGA representative actions and certain agency charges
Protects a company most where one practice could generate many identical small claims

The Supreme Court's decisions in AT&T Mobility v. Concepcion and Epic Systems v. Lewis established that class and collective action waivers in arbitration agreements are generally enforceable, including in employment, which is why they are now standard in consumer and employment arbitration clauses.

What It Does

A class action waiver decides whether a dispute can ever be aggregated. Sign it, and you agree to bring any claim only for yourself, in your individual capacity, and to stay out of any class, a collective wage action, or a representative proceeding. For a company facing many small, similar claims, that is the whole ballgame: a thousand individual arbitrations rarely get filed, while one class action with a thousand members is an existential number. The waiver almost always lives inside an arbitration clause, because that pairing is what courts enforce under the Federal Arbitration Act. For in-house counsel, the questions are whether the waiver is tied to an enforceable arbitration agreement, whether it carves out the claims that cannot be waived, and whether the governing law adds its own limits. A practical test: count the claims this contract could generate at scale, because the class waiver is worth most exactly where one event could harm many people the same way.

When You'll See It

The class action waiver is standard in employment and arbitration agreements, consumer terms of service, customer and subscriber agreements, and franchise and dealer agreements, almost always bundled with a mandatory arbitration clause. In employment it bars class and collective wage-and-hour actions; in consumer contracts it blocks the class actions that follow a data breach, a billing practice, or a product defect. You rarely see it standing alone, because its enforceability is tied to the arbitration provision it accompanies.

It matters most for any business whose conduct touches many customers or employees the same way, where a single policy could otherwise become a class. The waiver moves those disputes into individual arbitration, where the economics rarely support filing at all. That power is also its limit: courts and legislatures police it hardest exactly where the stakes are highest, carving out non-waivable claims and scrutinizing waivers that are buried, one-sided, or not clearly tied to a valid arbitration agreement.

Examples

Marcus & Millichap, Inc. / Richard Matricaria

Employment Agreement

Mutual waiver with PAGA carve-out

Mutual

2025

"The Parties further understand and agree that they may bring claims on behalf of themselves, and themselves only. The Parties hereby waive the right to bring, or otherwise participate in any fashion in, a claim or action on a class, collective or representative basis to the fullest extent allowed by law... if a court or arbitrator determines a certain matter may proceed by law as a class, representative, or collective action, that action shall proceed in court only."

Source

IBEX Global Solutions, Inc. / Michael Ringman

Employment Agreement

Class, collective, and representative waiver

Mutual

2026

"Parties to the Agreement waive any right they may otherwise have to pursue, file, participate in, or be represented in any claim brought in any court on a class basis or as a collective action or representative action. This waiver applies to any claim that is covered by the Agreement to the full extent such waiver is permitted by law."

Source

Tesla, Inc. / Employee

Arbitration Agreement

Individual-capacity waiver, no consolidation

Mutual

2016

"Any claim, dispute, or cause of action must be brought in a party's individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding... The arbitrator shall not have the authority to consolidate the claims of other employees."

Source

Splunk Inc. / Employee

Arbitration Agreement

Individual-capacity waiver under California arbitration law

One-Sided

2016

"...and shall be brought in your individual capacity, and not as a plaintiff or class member in any purported class or representative proceeding. The Federal Arbitration Act shall continue to apply with full force and effect notwithstanding the application of procedural rules set forth in the Act."

Source

Negotiate

If you want the waiver (you face many similar claims)

You face many similar claims

Pair the waiver with a clearly drafted, mutual arbitration agreement, because the FAA is what carries it.
State expressly that the arbitrator has no authority to hear or consolidate class, collective, or representative claims.
Carve out the claims that cannot be waived, such as California PAGA representative actions, so an overbroad waiver does not sink the whole clause.
Make the waiver and the arbitration agreement conspicuous and clearly assented to, especially in consumer terms.

If you are giving up the right (you may need the class)

You may need the class

Push for a carve-out so the class waiver does not reach claims worth pursuing only on an aggregate basis.
Watch for a non-mutual waiver that binds only you while the company keeps its options, and ask for reciprocity.
Preserve your right to file charges with agencies such as the NLRB, the EEOC, or a state labor board, which a waiver cannot foreclose.
Where the governing law limits waivers, such as PAGA in California, make sure the contract honors that limit rather than overreaching.

Read the waiver and the arbitration clause as one provision, because a court will, and a class waiver is only as strong as the arbitration agreement holding it up.

Red Flags

A class action waiver not tied to a valid arbitration agreement, which is far easier to challenge.
A one-sided waiver that bars only your aggregate claims while the other party keeps the courthouse open.
A waiver that purports to bar non-waivable claims, such as PAGA representative actions, which can void the whole provision in some states.
A waiver buried in fine print or a clickwrap with no clear assent, inviting an unconscionability fight.
A waiver that also tries to bar agency charges with the NLRB or EEOC, which it cannot lawfully do.

FAQs

Related Clauses

Arbitration

A contractual provision that requires the parties to resolve disputes through binding arbitration instead of court litigation.

Waiver of Jury Trial

A provision in which the contracting parties agree to give up their right to a jury, so that any dispute under the contract is decided by a judge instead.

Governing Law

A contractual provision that selects which jurisdiction’s substantive law will be used to interpret and enforce the agreement.

Severability

A contractual provision that keeps the rest of a contract in force if a court finds one part invalid or unenforceable.

Limitation of Liability

A contractual provision that caps the amount and types of damages one party can recover from the other.

This content is for informational purposes only and does not constitute legal advice.

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