The most important class action arbitration news of the past two years is that the ground is moving in several directions at once: the Supreme Court unanimously expanded who counts as a transportation worker exempt from the Federal Arbitration Act, the Ninth Circuit let district courts refuse to enforce arbitration agreements rolled out mid-litigation, both major arbitration providers rewrote their rules for mass filings, the SEC cleared the way for public companies to put arbitration clauses in their charters while Delaware blocked the harshest version, and Congress has one narrow forced-arbitration ban on the books with a broader one reintroduced in September 2025.
2026: The Supreme Court Expands the Transportation Worker Exemption
On May 28, 2026, the Supreme Court decided Flowers Foods, Inc. v. Brock unanimously, holding that delivery drivers can qualify for the FAA’s transportation worker exemption even if they never personally cross state lines. Justice Gorsuch, writing for the Court, rejected a bright-line rule that would have required workers to cross a border or use a vehicle that does. Workers who play a “direct, active, and necessary part” in moving goods on an intrastate leg of an interstate journey fall within the exemption and cannot be compelled to arbitrate under the FAA.
The ruling matters most to last-mile delivery and logistics companies that have relied on arbitration agreements to keep driver misclassification and wage disputes out of court. It does not decide whether state arbitration laws can fill the gap left when the FAA does not apply, and legal commentators have urged employers to add state-law fallback provisions to their clauses.
One lower-court decision has already tested the fallout. In Porteous v. Flowers Foods, Inc. (D. Or. 2025), a federal court held that a stand-alone class action waiver survived even though the arbitration agreement it was attached to was unenforceable under the transportation worker exemption. The court treated the waiver as a conceptually distinct contractual term, severable from the arbitration mandate. The New Jersey Supreme Court reached a similar conclusion for a stand-alone waiver in a residential lease in Pace v. Hamilton Cove (2024), while a federal court in Rhode Island went the other way under that state’s deceptive trade practices act. California, where FAA preemption may not reach non-arbitration waivers, remains unsettled.
The Ninth Circuit Pushes Back on Mid-Litigation Arbitration Rollouts
In Avery v. TEKsystems, Inc., decided January 28, 2026, the Ninth Circuit addressed what happens when a company rolls out a mandatory arbitration agreement to employees after class certification briefing has already closed in a pending wage-and-hour case. TEKsystems’ rollout flipped the class action’s opt-out mechanic into an opt-in: employees had to affirmatively reject the arbitration clause or lose their place in the class. Company emails called class actions “wasteful” and “inefficient,” were sent right before the holidays, and discouraged employees from consulting class counsel.
The court held that district courts have broad authority under Federal Rule of Civil Procedure 23(d) to refuse to enforce arbitration agreements obtained through misleading or coercive communications that threaten the fairness of class proceedings. It rejected TEKsystems’ argument that the FAA foreclosed that result, citing the Supreme Court’s 2022 decision in Morgan v. Sundance for the principle that arbitration contracts are treated like other contracts under procedural rules. The ruling aligns with similar holdings in the Fourth, Sixth, and Eleventh Circuits.
Unconscionability Still Works, Sometimes
Even after Concepcion, unconscionability remains one of the few reliable paths to invalidate an arbitration clause, and courts have continued to use it.
In Atlas Electrical Construction Inc. v. Flintco LLC (2025), the New Mexico Court of Appeals struck down a clause that gave one party “sole discretion” to decide whether a dispute would be arbitrated or litigated, finding it substantively unconscionable regardless of how sophisticated the contracting parties were. The California Supreme Court in Berman v. Freedom Financial Network (2024) invalidated a clause on both procedural and substantive grounds, pointing to fine-print burial and one-sided terms. And in Godun v. JustAnswer LLC (2025), the Ninth Circuit affirmed that no agreement to arbitrate existed where a website’s terms of service failed to provide “reasonably conspicuous notice” and did not obtain “unambiguous assent.”
Mass Arbitration Keeps Reshaping Company Strategy
Mass arbitration remains the most important practical pressure on the arbitration system. The strategy is to file thousands of individual arbitration demands at once so that the per-case fees companies normally pay to keep disputes out of court become the leverage against them.
The results have been striking. Keller Postman filed 12,501 demands against Uber on behalf of drivers alleging misclassification; Uber paid initial fees for only 296 cases and was sued to compel arbitration of the rest, eventually settling for between $146 million and $170 million. A coordinated filing of roughly 6,000 claims against DoorDash in 2019 triggered a $9 million bill before the process even started, and when DoorDash balked at paying, a federal judge ordered it to pay, noting the “poetic justice” of a company forced to use the system it had designed. Intuit faced about 40,000 TurboTax arbitration claims with potential costs a judge estimated at $128 million. Amazon, confronted with roughly 75,000 potential filings over Alexa-powered Echo recordings, removed mandatory arbitration from its retail website’s terms of use altogether.
The Chamber of Commerce’s Institute for Legal Reform has called mass arbitration the “21st-century equivalent of abusive class actions,” citing filings on behalf of nonexistent or ineligible claimants and failures by attorneys to relay settlement offers. Proponents argue mass arbitration is the only mechanism left after the Supreme Court shut down class actions, and some contend the tactic qualifies as protected concerted activity under the National Labor Relations Act.
Companies have adapted. Many have added mandatory informal resolution periods requiring consumers or employees to attempt a phone or video call before filing. Ticketmaster now requires consumers to “personally meet and confer, via teleconference or videoconference” and to pay a $300 filing fee before proceeding. Some have added bellwether and batching provisions, though California courts have frequently struck these down as unconscionable when they impose excessive delays or confidentiality restrictions. Attempts to sue arbitration providers to block fee collection, or to sue plaintiffs’ firms for allegedly manufactured claims, have generally failed; L’Occitane’s complaint against a plaintiff’s firm was dismissed.
What the AAA and JAMS Changed
Both major arbitration providers overhauled their mass arbitration procedures in 2024.
The American Arbitration Association’s Mass Arbitration Supplementary Rules took effect January 15, 2024, with revisions on April 1, 2024, and apply whenever 25 or more similar demands are filed. A designated “process arbitrator” handles threshold issues such as standing, filing requirements, and whether cases should proceed to full hearing or resolve on documents. A flat $11,250 initiation fee replaced per-case filing fees, split $8,125 for the business and $3,125 for claimants. Additional per-case business fees decrease with volume, ranging from $325 per case for the first 500 down to $100 per case above 3,000. Parties must initiate a global mediation within 120 days of the AAA confirming filing requirements have been met, and claimants’ counsel must affirm that information submitted for each case is true and correct.
JAMS followed on May 1, 2024, with its Mass Arbitration Procedures and Guidelines. The JAMS threshold is higher at 75 or more similar claims, and the procedures only apply if the parties have expressly adopted them in their arbitration agreement. JAMS charges a single $7,500 nonrefundable filing fee split between the parties ($5,000 for the business, up to $2,500 for claimants) and uses a “process administrator” with a similar gatekeeping role. JAMS does not require mandatory mediation. Neither provider has adopted formal bellwether procedures, though both anticipate parties may agree to them.
California PAGA After Adolph
California’s Private Attorneys General Act continues to produce friction with the FAA. In Viking River Cruises, Inc. v. Moriana (2022), the Supreme Court held that the FAA requires courts to separate an employee’s individual PAGA claims from representative claims brought on behalf of other workers and to send the individual claims to arbitration. The Court suggested, based on its reading of California law, that the employee would then lack standing to pursue the representative claims in court.
The California Supreme Court disagreed. In Adolph v. Uber Technologies, Inc. (July 2023), it held that compelling an employee’s individual PAGA claims to arbitration does not strip that employee of standing to pursue non-individual representative claims in court, reasoning that PAGA standing is established by the fact that a labor code violation occurred. The court asserted its authority as “the final arbiter of what is state law.”
The practical result is that California employers still face representative PAGA lawsuits in court even when they successfully compel individual claims to arbitration. Trial courts have discretion to stay the representative claims while arbitration proceeds, and the arbitrator’s determination of whether the employee qualifies as an “aggrieved employee” binds the court. If the answer is yes, the representative action moves forward. If no, standing is lost.
Live Nation v. Heckman
Live Nation has asked the Supreme Court to review the Ninth Circuit’s 2024 ruling that its mass arbitration program was both procedurally and substantively unconscionable. The Ninth Circuit declined to sever the offending provisions and held that the FAA did not preempt California’s unconscionability doctrine as applied to mass arbitration clauses.
Live Nation’s petition asks the Court to clarify whether mass arbitration qualifies as “arbitration” under the FAA at all and whether California’s approach to severability is preempted. The Court was scheduled to consider the certiorari petition at its September 29, 2025, conference, but no decision on review has been reported in the available materials. A grant would put the legal status of mass arbitration itself before the Court.
A New Front: SEC Reversal and Delaware’s Response
In September 2025, the SEC voted to stop blocking public companies from including mandatory arbitration clauses in their corporate charters or bylaws, reversing a longstanding position that such provisions were inconsistent with the federal securities laws.
Delaware, where most major U.S. corporations are incorporated, responded with Senate Bill 95, which amended the Delaware General Corporation Law. Effective August 1, 2025, new Section 115(c) permits corporations to designate forums for stockholder claims, including arbitration, but only if the provision allows stockholders to bring their claims in at least one Delaware court with jurisdiction. The effect is to stop companies incorporated in Delaware from using mandatory arbitration to bar securities claims from court entirely.
Uptake has been minimal. As of early 2026, only one company, Zion Oil & Gas, incorporated in Texas rather than Delaware, has adopted a mandatory arbitration provision for securities claims. SpaceX, also a Texas corporation, reportedly plans to include such a clause if it goes public. The Council of Institutional Investors, representing more than 135 funds, has formally opposed mandatory arbitration for securities disputes, citing limited discovery, no right of appeal, and the exclusion of proceedings from public record. SEC Chairman Paul Atkins has expressed disappointment with Delaware’s restrictions and suggested the FAA may preempt state laws that limit mandatory arbitration in this context, setting up a possible future confrontation.
Legislation: One Narrow Law, One Broader Bill, One State Push
Congress has enacted one targeted restriction. The Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, signed by President Biden on March 3, 2022, lets individuals alleging sexual assault or harassment void predispute arbitration agreements and class action waivers, regardless of when the agreement was signed. It passed 335 to 97 in the House and by voice vote in the Senate. Its scope is narrow: it covers sexual assault and harassment only, not racial discrimination, wage theft, or other employment disputes.
Broader reform has stalled. The Forced Arbitration Injustice Repeal Act, known as the FAIR Act, would eliminate forced arbitration in employment, consumer, and civil rights disputes. Representative Hank Johnson and Senator Richard Blumenthal reintroduced it in September 2025 as H.R. 5350 and S. 2799, with 56 House cosponsors. The bill has passed the House in previous sessions but has never cleared the Senate.
At the state level, New York’s Workers’ Rights Enforceability Act (Assembly Bill A01424 and related Senate versions) would prohibit mandatory arbitration clauses and class action waivers in employment contracts and impose strict conditions on any post-dispute arbitration agreement, including a 40-day waiting period, independent counsel, and written consent. The bill’s sponsors cite estimates that New Yorkers lost $390 million in stolen wages in 2019 that could not be recovered because of these clauses. As of mid-2026, it remains in committee.
California’s most ambitious attempt is effectively dead. Assembly Bill 51, signed in 2019, would have made it illegal for employers to require workers to sign arbitration agreements as a condition of employment, with criminal penalties. The law never took effect. In February 2023, the Ninth Circuit ruled in Chamber of Commerce v. Bonta that the FAA preempts AB 51 because its penalty-based scheme to discourage the formation of arbitration agreements conflicted with the FAA’s requirement that such agreements be treated on equal footing with other contracts. The injunction remains in place.