Consolidated Cases Involve Whether Federal Labor Law Overrides the Federal Arbitration Act’s Mandate that Arbitral Class Action Waivers Be Enforced
CHICAGO – (June 20, 2017)— DRI – The Voice of the Defense Bar has filed an amicus brief with the U.S. Supreme Court in support of the employers in three consolidated cases: Epic Systems Corp. v. Lewis, Ernst & Young LLP v. Morris, and National Labor Relations Board v. Murphy Oil USA, Inc. The brief was filed through DRI’s Center for Law and Public Policy.
The cases are notable in two respects. First, in one of the cases, NLRB v. Murphy Oil USA, Inc., the Solicitor General filed a petition for writ of certiorari on behalf of the National Labor Relations Board (NLRB) in the waning days of the Obama Administration. The Acting Solicitor General under the Trump Administration has now reversed this position and sided instead with the employers—a rare occurrence. Second, each of the cases has worked its way through three different Circuits: the Fifth, the Seventh, and the Ninth.
The purpose of the Federal Arbitration Act (FAA) was to overcome the hostility of the courts to arbitration and to require them to enforce arbitration agreements in accordance with their terms. In these consolidated cases, employees sued their employers for allegedly violating wage and hour laws, and the employers moved to compel individual arbitration of each claim. The employees argued that the arbitral class action waivers they signed were unenforceable because the National Labor Relations Act (NLRA) confers a substantive right to pursue wage and hour claims on a class or collective basis, and this substantive right overrode the FAA mandate.
In two of the consolidated cases, federal appellate courts agreed with the employees’ argument, and in the third, the federal appellate court ruled in favor of the employer, reversing the NLRB.
The DRI brief argues that the arbitral class action waivers in these cases must be enforced because the FAA mandates this result, and nothing in the text of the NLRA amounts to a contrary congressional command overriding the FAA. Tracing the development of the Supreme Court’s test for determining when another federal statute can override the FAA, DRI’s brief explains that the test is a stringent one requiring a clear statement in the text of the other statute that Congress intended to override the FAA’s command.
Brief co-authors David M. Axelrad, Felix Shafir, and John F. Querio of Horvitz & Levy (Burbank, California) are available for interview or expert comment through DRI’s Communications Office.
For the full text of the amicus brief, click here.
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