What It Does
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.
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."
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."
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."
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."
Negotiate
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.
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
This content is for informational purposes only and does not constitute legal advice.
