Earlier this month the United States Supreme Court decided to hear three cases which will resolve the split between various Courts of Appeals (discussed in our prior post here) as to whether individual arbitration agreements barring class arbitration actions in employment-related matters are enforceable. While the Court held in 2011 that the Federal Arbitration Act would allow companies to avoid consumer class actions by insisting upon individual arbitrations in their contracts, AT&T Mobility v. Concepcion, workers have contended that employment contracts are different. They have successfully argued that the National Labor Relations Act prohibits class waivers since it would impinge upon worker’s rights to engage in “concerted activities”. The Seventh Circuit Court of Appeals accepted such an argument in Epic Systems Corp. v. Lewis (discussed in our prior post here), and the Ninth Circuit accepted such an argument in Ernst and Young v. Morris. The Fifth Circuit Court of Appeals rejected the same argument in National Labor Relations Board v. Murphy Oil U.S.A.
Epic Systems had urged the Court to set a national standard regarding class waivers in employment arbitration provisions, citing an otherwise troublesome legal patchwork of different laws across different states. The Obama Administration also urged the Court to take the case, arguing in support of the workers’ position that such arbitration limitations are unenforceable.
All three cases were consolidated for argument with the case likely heard in April. By that time the current vacancy in the Court may be filled, though it is unclear what the federal government’s position will be under the new Trump Administration.