Employers across the country are anxiously awaiting a ruling from the United States Supreme Court regarding the enforceability of express waivers of an employee’s right to bring or participate in a class or collective action. In three cases set for oral argument on October 2nd – Epic Systems v. Lewis; Ernst & Young, LLP, et al. v. Morris, et al.; and NLRB v. Murphy Oil USA, Inc., et al. – the Supreme Court will decide whether Class Action Waivers contained within arbitration agreements governed by the Federal Arbitration Act (“FAA”) are enforceable against employees covered by the National Labor Relations Act (“NLRA”). These two federal statutes have been on a collision course for some time: the FAA mandates enforcement of arbitration agreements according to their terms, including terms that specify with whom parties choose to arbitrate their disputes, and the NLRA protects non-supervisory employees’ rights to engage in certain concerted activities.
The National Labor Relations Board (“NLRB”) has taken the position that class action waivers, even when contained within FAA-governed arbitration agreements, are unenforceable because they violate employees’ rights to engage in protected, concerted activity under the NLRA. Two of the lower court decisions, the Seventh Circuit’s Lewis v. Epic Systems, 823 F. 3d 1147 (7th Cir. 2016), and the Ninth Circuit’s Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016), have adopted the NLRB’s position. In the third case, Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015), the Fifth Circuit rejected the NLRB’s position and held that arbitration agreements, including class action waivers, must be enforced according to their terms under the FAA, notwithstanding the NLRB’s interpretation of the NLRA.
On October 2nd, Edward Berbarie of Littler Mendelson attended the Supreme Court Oral Argument and provided his commentary and insights, including the issues that were focused upon, the questions that were asked and how they were addressed by the parties, and his predictions as to how the Court will rule.
Edward F. Berbarie, Shareholder, Littler Mendelson P.C.