It's the NLRA vs. the FAA. Litigants on both sides are asking the Supreme Court to resolve a simple issue: Does the NLRA bar class action waivers in employment arbitration agreements?
Circuit courts are split. The issue is important in today's economy. It seems highly likely that the Court will grant certiorari to resolve this issue.
Here are the cases:
It all started with D.R. Horton, Inc., 357 N.L.R.B No. 184 (2012), with the NLRB holding that it is an unfair labor practice for an employer to enforce agreements with individual employees that require them to use individual arbitration for all work-related disputes, because this interferes with the employees' right to engage in concerted activities. The 5th Circuit rejected this reasoning in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir 2013), in part on the basis that the NLRB's holding conflicts with the Federal Arbitration Act. The Murphy Oil case is essentially the same as D.R. Horton.
Two former employees had signed an employment agreement that included an arbitration provision requiring all disputes to be resolved in individual, rather than collective, arbitration. The former employees nevertheless filed a class action lawsuit against petitioners in federal court. The 9th Circuit held that the arbitration provision violated the NLRA, and thus was unenforceable under the Federal Arbitration Act.
Employee Lewis signed an agreement to use arbitration for claims involving wage and hour claims, and waiving the right to participate in any class, collective, or representative proceeding. Lewis later filed a class action claim in federal court. The 7th Circuit held that the class action waiver is unenforceable because it interferes with an employee’s right to engage in concerted activity.
The employer's arbitration agreement provided that claims cannot be arbitrated by way of a class or collective action. The 2nd Circuit followed its precedent and held there was no illegal restrictions on employees’ substantive rights under the NLRA and the Norris-La Guardia Act.
[For recent decisions and pending employment law cases, see US Supreme Court Watch.]