December 11, 2017 Articles

NLRB Dynamics and the Potential Impact on Securities Class Actions

By Mark Kantor

On October 2, 2017, the U.S. Supreme Court heard oral argument in the three consolidated cases involving the policy of the National Labor Relations Board (NLRB) prohibiting arbitration clauses in employment agreements that bar class actions (Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA).

Many observers believe the Court's decision in these cases will come down to Justice Anthony Kennedy's vote. Reuters characterized Justice Kennedy's questions as "pro-employer."

Justice Anthony Kennedy, often the swing vote in major cases, asked questions that appeared to favor employers, as did two fellow conservatives, Chief Justice John Roberts and Justice Samuel Alito.

Kennedy indicated that a loss for workers would not prevent them from acting in concert because they would still be able to join together to hire the same lawyer to bring claims, even though the claims would be arbitrated individually. That would provide "many of the advantages" of collective action, Kennedy said.

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