Is an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration, and waive class and collective proceedings, enforceable under the Federal Arbitration Act, notwithstanding the provisions of the National Labor Relations Act (NLRA)?
This question caused a decisive split among federal circuit courts of appeal, resulted in the authorship of numerous articles and was a primary topic of webinars and seminars for over five years. On Monday, the Supreme Court gave us a long awaited answer: yes.
Justice Neil Gorsuch, who delivered the majority opinion (joined by the four remaining conservative Justices), began by asking two telling questions: “Should employees and employers be allowed to agree that any disputes between them will be resolved through one-on-one arbitration? Or should employees always be permitted to bring their claims in class or collective actions, no matter what they agreed with their employers?” Epic Systems Corp. v. Lewis, 584 U.S. ______ (2018).
Justice Gorsuch did not mince words: “[a]s a matter of law the answer is clear. In the Federal Arbitration Act, Congress has instructed federal courts to enforce arbitration agreements according to their terms – including terms providing for individualized proceedings.” Id. at *2.
Of note, the Supreme Court addressed the alleged conflict between the NLRA and the Federal Arbitration Act (FAA) and explained that the NLRA secures employees’ rights to unionize and collectively bargain, but says “nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum.” Id.
This decision will have immediate implications for 55 pending cases before the National Labor Relations Board (NLRB) involving allegations that employers violated the NLRA by maintaining or enforcing individual arbitration agreements or policies including class- and collective-action waivers.
Additionally, it provides an important tool for employers that have class-and collective-action waivers in their employment agreements or are looking to craft such waivers. If you haven’t, now is a good time to consider whether a mandatory individual arbitration agreement is right for your business. And remember: this decision does not prevent employees from challenging mandatory arbitration agreements on other grounds such as fraud, duress, or unconscionability.
It’s always important to have legal counsel carefully review applicable agreements before implementation or enforcement.
A member of the firm's Bloomfield Hills office, Courtney L. Nichols serves as Co-Leader of Plunkett Cooney's Labor and Employment Law Practice Group.
Ms. Nichols focuses her litigation practice in the area of employment law ...
Add a comment
- Employment Liability
- Labor Law
- Equal Employment Opportunity Commission (EEOC)
- Department of Labor (DOL)
- Employment Discrimination
- National Labor Relations Board (NLRB)
- Human Resources
- Wage & Hour
- Fair Labor Standards Act (FLSA)
- National Labor Relations Act
- National Labor Relations Board
- Employment Agreement
- Americans With Disabilities Act (ADA)
- Minimum Wage
- Whistleblower Protection Act
- Family Medical Leave Act (FMLA)
- Regulatory Law
- Paid Medical Leave Act (PMLA)
- OSHA Issues
- Unemployment Benefits
- First Amendment
- Title VII
- Sick Leave
- Public Education
- Workplace Harassment
- At Will Employment
- Hostile Work Environment
- Business Risk Management
- Transgender Issues
- Noncompete Agreements
- Workers' Compensation
- Department of Justice
- Medicare Issues
- Class Actions
- Sexual Harassment
- Civil Rights
- Social Media
- Retail Liability
- Emergency Information
- Uniformed Services Employment and Reemployment Rights Act (USERRA)
- Department of Education (DOE)
- Tax Law
- Title IX
- Medical Marijuana
- Right to Work
- Health Insurance Portability and Accountability Act (HIPAA)
- Union Organizing & Relations
- NLRB Finalizes Rule Broadening Joint Employer Test
- EEOC Issues New Proposed Enforcement Guidance on Harassment in the Workplace
- Proposed Rule Change to Minimum Salary Requirements Would Expand Overtime Pay to Millions of Workers not Currently Eligible
- U.S. Supreme Court Bolsters Right of Employees to Request Religious Accommodations
- U.S. Supreme Court Rules Website Designer Free to Refuse Services Under First Amendment
- NLRB Restores FedEx II Standard When Factoring Workers’ Entrepreneurship
- Sixth Circuit Adopts New “Similarly Situated” Employees Evaluation Standard for Issuing Court-Approved Notice of FLSA Suits
- Unanimous Supreme Court Finds Lip Service not Good Enough for Disabled Student
- Michigan Senate Votes to Repeal 2012 Right-to-Work Law
- Michigan Appellate Court Overturns Decision on Minimum Wage, Paid Sick Leave Requirements