January 27, 2017 Practice Points

Supreme Court Agrees to Clarify FAA vs. NLRB Issues

By Mitchell L. Marinello

On January 13, 2017, the Supreme Court of the United States granted certiorari in three cases addressing the enforceability of class/collective action waivers in arbitration agreements with employees.

No. 16-285, EPIC SYSTEMS CORP. V. LEWIS, JACOB
No. 16-300, ERNST & YOUNG, ET AL. V. MORRIS, STEPHEN, ET AL.
No. 16-307, NLRB V. MURPHY OIL USA, INC., ET AL.

In Epic Systems Corp. v. Lewis, Jacob, the Seventh Circuit held that an arbitration provision that required employees to bring wage and hour claims in arbitration and did not permit collective arbitration or collective action in any other forum violated the National Labor Relations Act and was invalid. 

In Ernst & Young et al. v. Morris, Stephen, et al.,the Ninth Circuit vacated a district court order compelling individual arbitration in an employees' class action alleging that Ernst &Young misclassified employees to deny overtime wages in violation of the Fair Labor Standards Act and California labor laws.

In NLRB v. Murphy Oil USA, Inc., et al., the Fifth Circuit held that Murphy Oil did not commit unfair labor practices by requiring employees to sign its arbitration agreement or seeking to enforce that agreement in federal district court.

The Supreme Court appears to be ready to resolve some of the sharp disagreements that exist over the interplay between the Federal Arbitration Act and the National Labor Relations Act. 

Keywords: class action waiver, employee, employment, NLRB, FAA

Mitchell L. Marinello is a partner at Novack and Macey LLP, Chicago, Illinois.


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