Source: https://laborandemploymentlawupdate.com/tag/federal-arbitration-act/
Timestamp: 2019-04-25 16:28:08+00:00

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Are Mandatory Arbitration Agreements Headed for the Supreme Court?
This past June, our blog reported on the Seventh Circuit’s decision in Lewis v. Epic Sys. Corp., 823 F.3d 1147 (7th Cir. 2016), which found that the Federal Arbitration Act does not require enforcement of an arbitration agreement based on the employee’s right under the National Labor Relations Act (NLRA) to engage in protected concerted activity. Specifically, in Lewis the Seventh Circuit held that employment arbitration agreements that include class action waivers violate the NLRA and cannot be enforced. This was the first time that a circuit court had adopted the NLRB’s position in D.R. Horton, Inc., 357 NLRB 184 (January 3, 2012).
A couple of months later, the Ninth Circuit, in Morris v. Ernst & Young, LLP, (9th Cir. (Cal.) August 22, 2016), followed suit and also found that an arbitration agreement that required employees to bring claims in “separate proceedings,” thereby prohibiting class and collective actions, violated the employees’ right to engage in concerted activity under the NLRA. Just like in Lewis, the employees in Morris had to sign arbitration agreements as a condition of employment. Stephen Morris subsequently filed a class and collective action against the company, alleging he and others had been misclassified as employees exempt from overtime under the Fair Labor Standards Act and California state law. In response, the employer filed a motion to compel arbitration pursuant to the agreements the employees had signed. The district court ordered individual arbitration for each and dismissed the complaint. The Ninth Circuit, however, reversed and held that such agreements interfere with the employees’ rights under Sections 7 and 8 of the NLRA regarding concerted activity.
Back in 2013, three circuit courts ruled that the NLRA does not prohibit class waivers. First, the Eighth Circuit ruled that class waivers were appropriate in Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013). The Second Circuit did likewise in Sutherland v. Ernst & Young, 726 F.3d 290 (2nd Cir. 2013). Finally, the Fifth Circuit reversed the NLRB’s decision that such agreements were unenforceable in D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013). Then, in 2014 the Eleventh Circuit arrived at the same conclusion and upheld class waivers in Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326 (11th Cir. 2014).
Certainly, this split among circuits makes it more likely that the Supreme Court will soon address whether employees will be able to waive their right to participate in collective actions if they choose to sign arbitration agreements. Indeed, petitions for writs of certiorari seeking review by the Supreme Court were filed in Lewis on September 2nd and in Morris on September 8th. How this issue is ultimately resolved, of course, depends largely on the outcome of the 2016 election.
Irrespective of who fills the vacancy left as a result of Justice Scalia’s passing, employers should still seek labor and employment counsel’s guidance with respect to arbitration agreements to determine if they are enforceable and/or if necessary revisions and amendments are required. Similarly, employers, with counsel’s assistance, should develop new strategies in light of potential changes that may be in the offing.
This entry was posted in employers, National Labor Relations Act and tagged Federal Arbitration Act, Mandatory Arbitration Agreements, NLRA on October 25, 2016 by smithamundsen.
On January 3, 2012, the NLRB held that a nationwide home builder committed an unfair labor practice under the National Labor Relations Act (NLRA) by implementing a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions (D.R. Horton Inc. and Michael Cuda, 357 NLRB 184, 1/3/11). In short, the NLRB held that employers may not compel employees to waive their right to collectively pursue litigation of employment claims in all forums, arbital and judicial.
In so holding, the NLRB took issue with the U.S. Supreme Court’s recent decision in AT&T Mobility LLC v. Concepcion, U.S., No. 09-893, 4/27/11. In Concepcion, the court, in a 5-4 decision, enforced AT&T’s customer cellular telephone contract that provided for mandatory arbitration on an individual basis and prohibited class action proceedings despite conflicting California state law. The court essentially held that the Federal Arbitration Act (FAA) preempts state laws that prohibit contracts from preventing class-action lawsuits. In judicial decisions that have since followed Concepcion, courts throughout the U.S. have concluded that employees may waive class-action rights by agreeing to individualized arbitration through employment arbitration agreements.
In distinguishing Concepcion, the NLRB held that employment arbitration agreements (unlike consumer contracts) cannot prevent employees from waiving their rights protected by the NLRA (i.e. collectively pursue wage/hour claims and/or disputes over terms and conditions of employment). The NLRB also reasoned that Concepcion involved a conflict between the FAA and a California state law, which implicated the U.S. Constitution’s Supremacy Clause; whereas in D.R. Horton the Supremacy Clause was not called into question as the issues involved purely federal statutes (FAA vs. the NLRA).
This entry was posted in Labor, National Labor Relations Board and tagged AT&T Mobility, D.R.Horton, Fair Labor Standards Act, Federal Arbitration Act, Inc., National Labor Relations Act, National Labor Relations Board, NLRA, NLRB on January 11, 2012 by smithamundsen.

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