SCOTUSblog's petition of the day for October 25 is one of four petitions that raise essentially the same issue:
Does the Federal Arbitration Act compel enforcement of an employment arbitration agreement that prohibits employees from seeking adjudication of any work-related claim on a class, collective, joint, or representative basis? Or is such an agreement unenforceable because the National Labor Relations Act prohibits employer interference with employees' right "to engage in … concerted activities for the purpose of … mutual aid or protection"?
The case is Patterson v. Raymours Furniture Co. [Cert petition] [2nd Circuit opinion] [Supreme Court briefs] In a summary order, the 2nd Circuit affirmed a district court order compelling arbitration of a claim alleging violation of the Fair Labor Standards Act and the New York Labor Law. 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 that there was no illegal restriction on employees' substantive rights under the NLRA or the Norris-La Guardia Act.
The 2nd Circuit panel seemed sympathetic to the employees' arguments ("If we were writing on a clean slate, we might well be persuaded"). However, the judges said they were "bound by our Court's decision in Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013)." [Opinion text]
Circuit courts are split. The petitioners in the four pending cases include the NLRB, one employee, and two employers. Apart from the obvious importance of the issue, this lineup of petitioners increases the likelihood that the Court will grant certiorari in one or all of the cases. We now need to wait until the completion of briefing at the certiorari stage before we know whether the Court will hear these cases. Don't expect anything to happen before December.
Here are the other three 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.
[For recent decisions and pending employment law cases, see US Supreme Court Watch.]