Machado et al. v. System4 LLC et al.

Case Updates

The Supreme Judicial Court held that the class arbitration waiver is enforceable in light of the U.S. Supreme Court's decision in American Express v. Italian Colors Restaurant.

Previously, the court held that the Supreme Court's decision in AT&T Mobility v. Concepcion allowed invalidation of a class arbitration waiver if it would deprive plaintiffs of an effective remedy, which the court found was not proven in this case.

NCLC urged the Massachusetts Supreme Judicial Court to reverse two decisions of the Massachusetts Superior Court that held bilateral arbitration agreements in a consumer sales contract and employment contract were unenforceable because they contained a class action waiver. NCLC argued in its amicus brief that enforcing arbitration agreements in these cases is not only federal law; it is also good public policy. The Federal Arbitration Act (FAA) promotes an emphatic federal policy in favor of arbitration, reflecting Congress's judgment that arbitration provides an efficient, streamlined, and cost-effective method of resolving disputes--including consumer and employee disputes. Enforcing bilateral arbitration agreements is also consistent with the Commonwealth's policy favoring arbitration as an expeditious and efficient means for resolving disputes.