Class Arbitration

Supreme Court Will Hear Class Action Waiver Cases

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Last week, the Supreme Court consolidated and agreed to hear three appeals of Circuit Court decisions concerning whether class action waivers contained in employment arbitration agreements infringe on employees’ rights under Section 7 of the National Labor Relations Act.  According to the schedule currently in place, briefing on these cases will commence in late February 2017.  Unless a ninth Supreme Court justice is appointed, confirmed, and seated before oral argument in this consolidated appeal, the possibility of a 4-4 decision—and resulting preservation of the status quo–looms large. 

 

Fifth Circuit Reaffirms Enforceability of Class Action Waivers in Employment Arbitration Agreements, But Their Fate Remains Unclear

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Employers commonly use arbitration agreements to minimize the expense and exposure of employment-related claims.   By mandating arbitration of employment disputes, they hope to ensure that these matters are resolved in a cost-effective and confidential manner.  Many arbitration agreements go a step further, requiring employees to pursue their claims individually, and to waive their right to proceed on a class or collective basis.   Unfortunately, the certainty employers have striven to achieve with such agreements has proven elusive in recent years, as the National Labor Relations Board (NLRB) and several courts have found that class action waivers violate employees’ rights.

Although the U.S. Supreme Court’s 2011 decision in AT&T Mobility LLC v. Concepcion upheld the enforceability of class action waivers in the consumer context, in the years since, the NLRB has repeatedly rejected the use of class action waivers in the employment context.  In In re D.R. Horton, the NLRB held that class action waivers inherently infringe on employees’