circuit splitWe may soon see a circuit split on the issue of class action waivers in FINRA employee arbitrations. In 2015, the U.S. Court of Appeals for the Second Circuit in Cohen v. UBS Fin. Services, 799 F.3d 174 (2d Cir. 2015) held that FINRA firms may use class action waivers (class waivers) to bypass FINRA rule 13204 that allows employees to file judicial class actions. The parties in Laver v. Credit Suisse Securities (USA), No. 18-cv-00828 (N.D. Cal. 2018) recently argued the same issue to the Ninth Circuit. If the Ninth Circuit decides the issue differently or if another circuit voids class waivers, the Supreme Court may be asked to resolve the conflict.

Background Facts in ‘Laver’

Christopher Laver, a former employee of Credit Suisse, filed a putative class action, seeking compensation after Credit Suisse closed its brokerage business. Credit Suisse moved to dismiss the putative class claims and argued that Laver was required to arbitrate his claims individually under the firm’s arbitration agreement that contained a class waiver. The district court followed the Second Circuit’s decision in Cohen and granted Credit Suisse’s motion.

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