Employers who have watched the National Labor Relations Board — the nation’s primary enforcer of labor law — over the years anticipate that it will reshuffle its priorities soon after the White House changes parties. The agency swore in Jennifer Abruzzo as its new general counsel on July 22, 2021; and three weeks later, Abruzzo released an internal memorandum that is a blueprint for changes to the law she would like to see the agency implement.
Earlier this week, the U.S. Supreme Court held that an arbitration agreement cannot be read as permitting class arbitration unless the agreement clearly and explicitly so provides; it is not enough that the agreement is susceptible to the interpretation that it permits class arbitration. This holding gives employers another tool to fend off class actions and compel alleged class claims to individual arbitration.
A group of security workers for the National Football League urged Judge Andrew L. Carter, Jr. of the Southern District of New York to deny the NFL’s motion to arbitrate the group’s claims, arguing they never agreed to arbitrate statutory employment rights with the league. In Foran, et al. v. National Football League, et al., the group of security workers sued the NFL in November 2018 for unpaid overtime wages under the Fair Labor Standards Act (FLSA), among other claims, alleging the NFL misclassified them as independent contractors. The NFL moved to compel arbitration arguing the security workers’ claims are covered by the arbitration provision in their independent contractor agreements. The plaintiffs, in opposition, contend that unless the arbitration provision specifically includes a waiver of statutory claims under the FLSA, the NFL cannot compel arbitration of the claims. The motion remains pending before Judge Carter.
On May 21, 2018, the U.S. Supreme Court issued its long-awaited opinion in Epic Systems Corporation v. Lewis, in which it held that arbitration agreements containing class action waivers were enforceable notwithstanding the National Labor Relations Act’s protection for employee “concerted activity.” The five-Justice majority opinion sparked a fiery dissent by Justice Ruth Bader Ginsburg, who focused on the opinion’s potential impact on wage and hour litigation, among other employee activities. In response, this week, Washington State’s Democratic Governor Jay Inslee issued a sweeping Executive Order seeking to discourage employers from implementing (or continuing to rely on) arbitration agreements with class action waivers. Although Governor Inslee’s action is the exception so far, it may signal a broader backlash to arbitration agreements with class action waivers in the employment context.
Late last year, a bipartisan coalition in the United States Senate sponsored legislation to ban the use of mandatory arbitration agreements to settle sexual harassment and sex discrimination claims (H.R. 4734/S. 2203). While that bill—titled the “Ending Forced Arbitration of Sexual Harassment Act of 2017”—remains pending, a similar bill is also now pending before the California legislature (A.B. 3080). If enacted, A.B. 3080 would prohibit employers from requiring mandatory arbitration agreements as a condition of employment, continued employment, or the receipt of any employment-related benefit, such as a bonus.
Earlier this month, the Superior Court of New Jersey, Appellate Division, issued a decision that may cause employers considering mandatory arbitration agreements to consider jury-waiver agreements instead. In Noren v. Heartland Payment Systems, Inc., 2017 WL 476216 (App. Div. Feb. 6, 2017), the Court invalidated a jury-waiver provision’s application to statutory employment claims, but explained that, worded properly, such waivers are enforceable. Litigating in court without a jury has certain advantages and New Jersey employers considering arbitration programs may also want to consider jury waiver provisions as another possible option.