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SCOTUS to Address Current Split Over Enforceability of Class Action Waivers Contained in Mandatory Arbitration Policies

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Many employers have implemented mandatory arbitration policies requiring that all employment related disputes be resolved through final and binding arbitration rather than in traditional court proceedings. In addition to these potential benefits, many employers have added class action waivers to their arbitration policies, in essence requiring that claims be brought on an individual basis only, and not as class or collective actions.  In the employment context, National Labor Relations Board (NLRB) has taken the position that class action waivers violate workers’ Section 7 rights under the National Labor Relations Act (NLRA) to engage in protected concerted activity, and are therefore unenforceable.

To date, this somewhat novel argument has been expressly rejected by three federal courts of appeals, i.e., the 5th, 2nd, and 8th Circuits, but expressly adopted by three other federal courts of appeals, i.e., the 7th, 9th, and 6th Circuits. See here for a discussion of the Ninth Circuit’s approach. The U.S. Supreme Court thus had little alternative but to step in and resolve this national split of authority, and has done so in three consolidated appeals – NLRB v. Murphy Oil USA, Inc., Ernst & Young LLP v. Morris, and Epic Systems v. Lewis.

A decision is expected by early next year, which will undoubtedly have a profound effect on employee relations and future employment litigation in the United States. See here for further information.