Snell & Wilmer
Legal Alert
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January 17, 2017
Mandatory Employee Arbitration Heads to the U.S. Supreme Court
by John S. Delikanakis and Aleem A. Dhalla

Last Friday, the U.S. Supreme Court agreed to hear three cases with a similar question: whether employers can force employees to arbitrate employment claims on an individual basis and bar such claims from being brought collectively or as part of a class action. The three petitions for certiorari can be reviewed here. (1) N.L.R.B. v. Murphy Oil USA, Inc.; (2) Epic Sys. Corp. v. Lewis; and (3) Ernst & Young, LLP v. Morris.

The National Labor Relations Board (NLRB), the government agency charged with enforcing U.S. labor laws, maintains that such mandatory arbitration agreements violate the National Labor Relations Act’s (NLRA) provision regarding workers’ rights to engage in “concerted activities.” The U.S. Court of Appeals for the Fifth Circuit[1] holds that such agreements are valid. Conversely, the Seventh[2] and Ninth[3] Circuits hold that such agreements violate the NLRA. It remains to be seen if the NLRB’s positon will change under the Trump administration.

In deciding these cases, the Court will resolve the split between the federal circuit courts of appeal. Notably, in 2011, the Court upheld the validity of similar mandatory arbitration provisions as applied to consumer contracts.[4] The Court will now decide whether mandatory arbitration provisions are also valid between employers and employees.  The issue has been a hot topic in Human Resources circles for some time.  Hopefully, employers will soon know whether class waivers and arbitration provisions can be enforced.

These cases will be heard by the Court this term, although a date for oral argument has not been set. It is expected that the Court will hear these cases in April, with a decision in June or early July.

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Notes:

[1] Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013 (5th Cir. 2015), cert. granted, (U.S. Jan. 13, 2017).
[2] Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016), cert. granted, (U.S. Jan. 13, 2017).
[3] Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016), cert. granted, (U.S. Jan. 13, 2017).
[4] See AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011).

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