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Last month, the Supreme Court ruled in American Express v. Italian Colors Restaurant that the Federal Arbitration Act (FAA) does not permit courts to invalidate a contractual waiver of class arbitration simply because a plaintiff’s cost of individually arbitrating a federal statutory claim exceeds the plaintiff’s potential recovery. Although the court issued its holding in the context of an antitrust dispute between merchants and credit card giant American Express, the repercussions of the decision are likely to be felt most immediately in the realm of employment litigation, particularly with respect to wage-and-hour claims brought under the Fair Labor Standards Act (FLSA). The rest of this article discusses the court’s reasoning in the American Express decision, and details the impact it may have on employers’ risk of exposure to federal class action arbitration.

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