The U.S. Supreme Court's new term will kick off with arguments over whether mandatory arbitration agreements that force workers to sign away their class action rights are legal under federal labor law, and give the justices a chance to decide whether to tackle several other hot-button employment law issues, such as whether Title VII protects workers from discrimination based on their sexual orientation.
Here, Law360 looks at seven high court employment cases that are on attorneys’ radar.
Are class waivers legal?
For employment law observers, the matter that is in a class all its own this Supreme Court term will be a trio of consolidated cases that the high court agreed to review, to decide whether employers can legally force workers to sign away their right to pursue class actions by including class waiver provisions in arbitration agreements they must sign as a condition of employment.
The Supreme Court granted certiorari in January to the three cases, including one case out of the Fifth Circuit that pits the National Labor Relations Board against Murphy Oil USA Inc. In that case, the appellate court sided against the board’s position that mandatory class waivers violate workers’ right to engage in concerted action under Section 7 of the National Labor Relations Act.
While the board is not a direct party to the other two cases, which involve Epic Systems Corp. and Ernst & Young, the Seventh and Ninth circuits in both of those matters adopted the labor board’s long-standing position that such arbitration agreements are not legal.
Since the high court agreed in January to hear the cases, the Sixth Circuit has also weighed in, siding with the Seventh and Ninth circuits. The Second and Eighth circuits, meanwhile, have taken positions similar to that of the Fifth Circuit.
In August, the cases took another turn when the U.S. Department of Justice took the rare step of reversing its position on the issue, outlined during the Obama administration, and saying agreements containing class waivers have to be enforced under the Federal Arbitration Act and can’t be precluded by the NLRA.
Despite the DOJ’s about-face, the NLRB still held firm to its position that agreements with class waivers violate the NLRA, and NLRB general counsel Richard Griffin will be defending that position during oral arguments on Oct. 2.
Littler Mendelson PC shareholder Edward Berbarie told Law360 that class waivers are a big issue for businesses and that they have “created so much uncertainty for employers with national operations.”
“Class and collective actions are costly, time-consuming and can involve high stakes for employers, employees and the lawyers involved,” Berbarie said. “The issue is important — even critical — to everyone involved.”
John Lewis of BakerHostetler said the class waiver cases also contain numerous “bundled issues” beyond whether class waivers violate Section 7 that could “have future ramifications,” such as whether the justices will use the case as an opportunity to wade into the issue of so-called Chevron deference to federal agencies and when and how it is appropriate.
“It’s hard to tell whether the Supreme Court might take on deference,” Lewis said. “I’d hate to read too much into oral arguments in any court, but you might be able to tell from the questions [the justices ask] whether they want to move into the deference issue.”
The cases are Ernst & Young LLP et al. v. Stephen Morris et al., case number 16-300; NLRB v. Murphy Oil USA Inc., case number 16-307; and Epic Systems Corp. v. Lewis, case number 16-285, before the U.S. Supreme Court.