The NLRB wants to stop class action waivers in employment arbitration agreements, arguing they violate the National Labor Relations Act. This issue has been raging for several years and divided federal courts. As reported in our November 2, 2015, blog post, the Fifth Circuit Court of Appeals upheld a class action waiver in the important Murphy Oil case. Undaunted, the NLRB has asked the U.S. Supreme Court to review the issue and the high court has agreed to do so in a series of three cases, one of which is Murphy Oil.
What does this mean for employers? If the Supreme Court holds that class action waivers are enforceable in employment arbitration agreements the NLRB’s attack on this issue will end. However, if the Supreme Court rules in favor of the NLRB, the decision could have far reaching impact on employers’ use of class action waivers in arbitration agreements. Such waivers are often the saving grace for employers facing costly class or collective action lawsuits as the class allegations fall away when the employer compels arbitration and then asserts the class waiver provisions. Without such provisions employers should brace for more employment class actions. If you have those waivers or are considering implementing them, keep an eye on this case, including whether President’s Trump’s choice for a ninth justice will be seated in time to participate in the decision.