A class action waiver is a contract (or a provision in a contract) that attempts to restrict a person's right to file a class action lawsuit. Large corporations often use these waivers to attempt to prevent their customers or employees from filing class actions.
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At A Glance
Class action waivers are often hidden in the fine print of customer agreements and other documents signed by customers or employees.
Credit card companies, banks, and employers, among others, will try to use these waivers to limit your ability to file class action lawsuits.
If you signed a class action waiver, you may still be able to file a class action lawsuit. This is because courts often rule that class action waivers are invalid.
How Does This Affect Me?
A class action waiver may or may not prevent you from filing a class action.
Because many companies would prefer not to face class action claims in court, corporations sometimes require their customers or employees to sign contracts containing provisions that aim to restrict these individuals from filing class actions.
Credit card agreements sometimes contain class action waivers that will try to prevent cardholders from filing a class action in the event that the bank that issued the cards does something illegal.
Penny Bank starts charging its credit card holders an extra $15 fee every time they use their cards out of the country. Each cardholder has signed an agreement that contained a class action waiver.
If it is found that Penny Bank is wrongfully charging this $15 fee, its customers may not be able to file a class action lawsuit to recover the improper fees because of the class action waiver. This does not necessarily mean, however, that these bank customers are without legal recourse.
Does Signing a Class Action Waiver Prevent Me From Suing?
While companies may require customers or employees to sign class action waivers, the validity of such contracts is often challenged in court.
Courts often rule that class action waivers are unenforceable in lawsuits involving allegations of employment discrimination, unpaid overtime or minimum wage violations.
If a customer or employee has signed a class action waiver, the person may still be able to file an individual lawsuit to recover any damages he or she has suffered. Moreover, a class action attorney can review the waiver to determine if it violates state or federal law. In many cases, even though a person has signed a class action waiver, a judge will rule that the agreement is invalid and allow the lawsuit to proceed as a class action.