In three cases pending before the United States Supreme Court in the upcoming term, the Court will address whether employees can be forced to arbitrate class action employment law claims. The three cases, involving Murphy Oil, Epic Systems and Ernst & Young, highlight the two sides of the debate that have split the Circuit Court of Appeals. The National Labor Relations Board has taken the position that requiring employees to give up their right to arbitrate class or collective action claims is a violation of the provision of the National Labor Relations Act that protects employees’ rights to engage in concerted activity.
In the key case to address this issue, D.R. Horton, Inc. v. NLRB, the Fifth Circuit Court of Appeals rejected the NLRB’s position. The Fifth Circuit held that arbitration agreements under the Federal Arbitration Act take precedence over the National Labor Relations Act and must be enforced. The Fifth Circuit issued a similar decision in Murphy Oil, which is one of the cases pending at the U.S. Supreme Court. Other Courts of Appeals including the Second Circuit, which includes Connecticut and New York, have agreed taken the same position and rejected the NLRB’s stance.
By contrast, the Seventh and Ninth Circuits, in the Epic Systems and Ernst & Young decisions held that employees’ rights under the National Labor Relations Act would be rendered meaningless if they cannot bring collective actions. This position has been has been supported by 17 States, as well as major unions, the American Civil Liberties Union and the NAACP. Several courts and judges in circuits that have upheld barring class actions in arbitration have expressed similar views and concerns but have felt constrained to follow the precedent in their circuits.
The decision on these three cases likely will provide key insight into the current Supreme Court’s views towards arbitration, employees and the National Labor Relations Act. Oral argument on the case is scheduled for October 2, 2017; a decision is expected in early 2018. The Supreme Court cases are NLRB v. Murphy Oil USA, Inc., Case 16-307; Epic Systems Corp. v. Lewis, Case 16-285, and Ernst & Young, LLP et. al, v. Stephen Morris et. al., Case 16-300. Stay tuned.