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Picture a nerdier version of the Ultimate Fighting Championship, where persuasive legal briefs and sharp oral advocacy are like rear naked chokes and “ground and pound.”
The fight card.
[Cue music]
In the red corner, we have the Federal Arbitration Act. Among other things, the FAA allows an employer and employee to agree that all employment-related claims between them will be arbitrated (as opposed to heard in court, with a jury). These arbitration agreements often include a provision prohibiting employees from pursuing class or collective actions, such as one might see in a wage-and-hour battle.
And, in the blue corner, we have the National Labor Relations Act. The NLRA guarantees employees the right to discuss their working conditions with one another; also known as “protected concerted activity.” The National Labor Relations Board has argued that an arbitration agreement with a collective/class action waiver violates the NLRA because it hinders protected concerted activity.
It’s the FAA versus the NLRA.
The build up.
I blogged about it here in September:
Appellate courts have split on this issue. The Seventh and Ninth Circuits have sided with the Board. The Fifth and Eighth Circuits have agreed with employers. And now, the Board has asked the Supreme Court to resolve the circuit split. According to this report from Lawrence Dube, the NLRB petition follows two others from employers that are now pending before the Supreme Court.
On Friday, Law360‘s Vin Gurrieri reported here that the Supreme Court agreed to resolve the circuit split and will consolidate the three cases.
What’s at stake?
Lots.
We’ve seen a spike in wage-and-hour collective/class actions and that’s with the the benefit of many seemingly valid arbitration agreements with collective/class action waivers. Thankfully, the DOL’s overtime rules are on life support. Still, a Supreme Court ruling in favor of the NLRB could be like a class/collective action steroid injection.
Conversely, a business-friendly ruling could embolden more employers to use arbitration agreements with collective/class action waivers and cause a corresponding decline in these big stakes employment lawsuits.
What will happen? No idea, especially with an empty seat on the Supreme Court.
Either way, keep it here for updates.