Can employers enforce arbitration agreements in which employees have agreed not to bring class actions? Or are such agreements unenforceable because they interfere with employees' right to engage in concerted activity? Those are the issues in Epic Systems Corp v. Lewis (consolidated with Ernst & Young v. Morris and NLRB v. Murphy Oil) [Briefs], argued this morning at the US Supreme Court. [Oral argument transcript]
This is a classic case of the Federal Arbitration Act vs. the NLRB's interpretation of the National Labor Relations Act.
The employers argue that The Federal Arbitration Act requires the enforcement of arbitration agreements unless Congress has clearly commanded otherwise, which it has not.
The NLRB and the employees argue that class-action waivers interfere with employees' right to engage in concerted activity – which is protected by the National Labor Relations Act – and that agreements with class-action waivers are unlawful and unenforceable.
As a bonus, we got to see a Department of Justice lawyer argue against an NLRB lawyer – the DOJ having switched sides and now arguing in favor of the employers and against the employees and the NLRB. We live in strange times.
The pundits are saying that the employers will win these cases by a 5-4 vote. I'm keeping my wallet in my pocket.
Justice Gorsuch remained silent, which was eerie in light of his previous talkativeness in previous arguments. Justice Thomas (as is his custom) was also silent.
Justices Breyer, Kagan, Sotomayor, and Ginsburg (unsurprisingly) voiced strong support for the NLRB and the employees.
Justice Breyer suggested a narrow holding: that in these cases the agreements unlawfully forbid employees from filing their claims in a single proceeding. That would allow the Court to avoid deciding the larger issue of whether it is unlawful to prohibit a single employee from filing a class action.
Chief Justice Roberts and Justice Alito seemed to lean toward the employers' views. The Chief Justice at one point said to the employee's lawyer, "So this decision in your favor would invalidate the agreements covering 25 million employees?"
Justice Kennedy – usually seen as the "swing vote" between liberal and conservative Justices – pointed out that the employees still have other concerted activities available, such as hiring the same lawyer, using the same evidence, and otherwise collaborating. (I'm not impressed with an argument that says it's OK to take away part of a right so long as you don't take it all away.)
Look for a close vote, and a decision in January or February.
[For a list of current employment law cases, see Supreme Court Watch