On the first day of its new term, the United States Supreme Court will hear oral argument regarding whether class-action waivers included in an employer’s arbitration agreement are lawful under the National Labor Relations Act. In January, the nation’s highest court granted certiorari in NLRB v. Murphy Oil USA, Epic Systems Corp. v. Lewis, and Ernst & Young, et al. v. Morris and consolidated the three cases in order to resolve a circuit split. Previously, the Seventh and Ninth Circuits sided with the National Labor Relations Board (“NLRB”) and held that a collective action ban included in an employment contract violates the National Labor Relations Act. In contrast, the Fifth Circuit rejected the NLRB’s efforts to ban class-action arbitration waivers in Murphy Oil.
The question presented to the Supreme Court is:
Whether arbitration agreements with individual employees that bar them from pursuing work-related claims on a collective or class basis in any forum are prohibited as an unfair labor practice under 29 U.S.C. 158(a)(1), because they limit the employees’ right under the National Labor Relations Act to engage in “concerted activities” in pursuit of their “mutual aid or protection,” 29 U.S.C. 157, and are therefore unenforceable under the saving clause of the Federal Arbitration Act, 9 U.S.C. 2.