[2] All three clauses are the subject to controversy and wide legal debate, with supporters claiming the tools are strong risk management tools and the expense that class action litigation presents both in regard to time and money, though advocacy groups argue that these clauses reduce the rights of consumers and employees and prevent companies from being held accountable for grievances such as wage and hour violations.
[3][4] Class action waivers legality across countries and administrative decisions range in legality between jurisdictions, with some countries like France and administrative divisions like Ontario in Canada banning such clauses, while others, most prominently the United States via its Supreme Court ruling in AT&T Mobility LLC v. Concepcion, have rules that such clauses are enforceable.
Justice Clarence Thomas concurred in a separate opinion, writing that the illegality of the class action waiver is a public policy defense, referring to McMullen v.
[13] The Fifth Circuit also ruled that within its circuit, class action waivers not attached to an arbitration agreement are legal in a 2017 case between the NLRB and D. R. Horton, Inc.[14] Naked class action waivers, though, are subject to state laws, and as demonstrated in 2023 by rulings made by courts in New Jersey and Rhode Island, they may be overturned and declared unconscionable by state courts.
[18] Many countries have not tested a class action waiver in courts, though the international law firm CMS predicts that these clauses are unconscionable or unenforceable in Germany, Italy, Russia, and in England and Wales.
In Karpik, the court found that Australian Consumer Law in section 23 (which already bans standard form contracts) prohibits class action waivers.
On the provincial level, Ontario, per the Consumer Protection Act of 2002, has banned class action waivers; similar laws have been passed in the provinces of Quebec and Saskatchewan.