May 01, 2017

Arbitration at a Cross Road: Will the Supreme Court Hold the Federal Arbitration Act Trumps Federal Labor Laws?

By John Jay Range and Bryan Cleveland

The Supreme Court will shortly be considering three controversial cases that impact the employment agreements of millions of Americans. The National Labor Relations Board (NLRB) has held that it is an unfair labor practice under the National Labor Relations Act of 1935 (NLRA)1 for employers to require employees to sign mandatory arbitration agreements waiving any right to class, collective, or consolidated dispute resolution with other employees. The U.S. Circuit Courts of Appeals, however, had been unanimous in refusing to enforce this NLRB rule. That changed last year when both the Seventh2 and Ninth Circuits3 agreed with the NRLB, creating a circuit split with the Second,4 Fifth,5 and Eighth Circuits.6 To resolve the circuit split, the Supreme Court agreed to review the decisions of the Seventh and Ninth Circuits enforcing the NLRB rule, as well as a new decision of the Fifth Circuit7 denying enforcement of the rule.

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