SCOTUS To Decide Class Action Waivers

By Bill Wright

The Supreme Court has agreed to resolve the simmering dispute between the NLRB and (essentially all) employers over class action waivers. The NLRB has maintained in a number of cases that employers may not enforce arbitration agreements with employees that (1) require employees to arbitrate all disputes and (2) prohibit the employees from bringing collective or class actions in the arbitration. Although two circuit courts have agreed with the Board, most courts have disagreed, relying on the Federal Arbitration Act.

Now the Supreme Court will decide the matter.   The Court granted review in three cases: Murphy Oil USA, Inc. v. NLRB; Epic Systems Corp. v. Lewis, and Ernst & Young LLP v. Morris.  The parties in the three cases phrase the legal issue differently, but the gist of it is best stated in Epic Systems:

Whether an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration, and waive class and collective proceedings, is enforceable under the Federal Arbitration Act, notwithstanding the provisions of the National Labor Relations Act.

Stay tuned for oral argument and the Court’s eventual pronouncement of the Law of the Land.