Over the last fifteen years, one of the most consequential changes to American consumer law happened almost entirely outside public attention. Class action waivers — contractual clauses that prevent customers from joining together to sue companies and force individual disputes into private arbitration — became standard in nearly every consumer contract. The Supreme Court has repeatedly upheld their enforceability. Congress has had multiple opportunities to limit them and has declined to act. The cumulative effect has been the quiet evisceration of the strongest consumer protection mechanism the U.S. legal system ever had.
What class actions used to do
Before class action waivers became universal, class actions were the primary mechanism by which consumers could hold companies accountable for low-dollar, high-volume harms — the kind of harms where any individual claim is too small to be worth pursuing alone but where the cumulative damage across millions of customers is enormous. Predatory fees, false advertising, defective products, deceptive billing practices, and discriminatory pricing all sustained class actions that resulted in real settlements and real behavioral changes. The structural logic was that aggregating small claims gave consumers leverage they couldn’t have individually.
How waivers work
A class action waiver in a consumer contract typically requires two things: that any disputes be resolved through individual arbitration rather than litigation, and that the customer specifically waive the right to participate in any class or collective action. Sign up for a credit card, an internet service, a cell phone plan, a streaming service, an employment relationship — almost certainly you’ve agreed to one of these. The clauses are often buried in dozens of pages of terms, the signing is usually a click rather than a signature, and the waiver applies regardless of whether the customer ever read it.
The Supreme Court enforced them aggressively
The doctrinal foundation came primarily from two Supreme Court decisions: AT&T Mobility v. Concepcion in 2011 and American Express v. Italian Colors in 2013. Both held that class action waivers in arbitration agreements are enforceable under the Federal Arbitration Act, even when the cost of individual arbitration would be larger than the value of the claim, effectively making the underlying right unenforceable in practice. The Court has continued to extend the logic in subsequent decisions, leaving little practical room for state courts or regulators to push back.
Why Congress hasn’t responded
Multiple legislative proposals — the Forced Arbitration Injustice Repeal Act and various sector-specific bills — have been introduced over the years. Most have stalled. The exception, narrowly: in 2022 Congress did pass the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act, which carved out one specific category of claims from forced arbitration. Outside that narrow exception, the regime remains intact. Industry lobbying, partisan deadlock, and the relatively low public salience of the issue have combined to prevent broader reform despite repeated proposals.
Bottom line
The class action waiver regime is one of the largest single shifts in consumer power in modern American legal history, executed through contracts most consumers never read and Supreme Court decisions most consumers never hear about. Reform is possible — the 2022 sexual assault carve-out demonstrates that — but absent broader political pressure, the default arrangement will persist. Anyone signing a consumer contract today is almost certainly agreeing to one of these clauses, and the practical legal consequences of doing so are larger than the unread small print would suggest.
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