What do two employers, one employee, and the NLRB have in common? They all want the US Supreme Court to decide on the legality of arbitration agreements that bar employees from pursuing work-related claims on a collective or class basis. Huge numbers of employers' and employees' rights are at stake, circuits courts are split, and more cases will be coming in from other circuits soon.
It all started with D.R. Horton, Inc., 357 NLRB 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 F3d 344 (5th Cir 2013), saying that (1) the NLRA does not contain a “congressional command overriding” the Federal Arbitration Act (“FAA”); and (2) “use of class action procedures . . . is not a substantive right” under Section 7 of the NLRA.
NLRB v. Murphy Oil USA [Cert petition] [5th Circuit opinion] [Supreme Court briefs] is SCOTUSblog's petition of the day for November 2. The Murphy Oil case is essentially the same as D.R. Horton, and the 5th Circuit again ruled against the NLRB.
SCOTUSblog petitions of the day have included three other cases raising similar issues:
- Patterson v. Raymours Furniture Co. [Cert petition] [2nd Circuit opinion] [Supreme Court briefs]
- Ernst & Young, LLP v. Morris [Cert petition] [9th Circuit opinion] [Supreme Court briefs]
- Epic Systems Corporation v. Lewis [Cert petition] [7th Circuit opinion] [Supreme Court briefs]
Taken as a whole, the petitions in the four cases raise these issues:
- Does requiring employees to use individual arbitration for all work-related disputes interfere with the employees' right to engage in concerted activities under NLRA Section 7?
- Is the FAA’s rule that arbitration agreements be enforced “overridden by a contrary congressional command” in the NLRA? Shearson/Am. Express Inc. v. McMahon, 482 U. S. 220 (1987).
- Is an arbitration agreement precluding class proceedings invalid because it operates as a "prospective waiver of a party’s right to pursue statutory remedies”? Am. Express Co. v. Italian Colors Rest., 133 S. Ct. 2304 (2013).
- Is the rule in the NLRB's D.R. Horton case a proper application of the “savings clause” of FAA Section 2, which allows arbitration agreements to be denied effect based on generally applicable “grounds * * * at law or in equity for the revocation of any contract”?
The deadlines for filing responses are November 10 (Murphy Oil), November 14 (Epic Systems and Ernst & Young), and November 28 (Patterson). So we don't expect the Court to act on any of these petitions until their conferences on December 2 or 9.
[For recent decisions and pending employment law cases, see US Supreme Court Watch.]