On March 30, 2022, a panel in the Third Circuit Court of Appeals overruled nearly 30-year-old precedent and held that arbitration provisions do not survive the expiration of a collective bargaining agreement (CBA) in Pittsburgh Mailers Union Local 22 v. PG Publishing Co. The previous rule, first articulated in Luden’s Inc. v. Local No. 6 Union of the Bakery, Confectionary & Tobacco Workers International Union, 28 F.3d 347 (3d Cir. 1994), was premised on the idea that where an employer and a union agree to maintain certain terms and conditions of employment after the expiration of a CBA, a “new implied-in-fact-CBA” is formed that implicitly incorporates the expired CBA’s dispute resolution mechanisms. The only exceptions were situations where both parties intended the arbitration clause to expire with the contract or where one party, under the totality of the circumstances “objectively manifest[ed] to the other a particularized intent . . . to disavow or repudiate that term.” These exceptions were exceedingly narrow.
A divided three-judge panel of the Ninth Circuit Court of Appeals vacated the January 2020 preliminary injunction against enforcement of Assembly Bill 51 (AB 51), and upheld portions of the law that prohibited employers from making arbitration agreements a condition of employment. As a result of this decision, the Ninth Circuit has resurrected California Labor Code § 432.6, that bars businesses from requiring workers to arbitrate job-related claims. However, the court invalidated portions of AB 51 imposing civil and criminal penalties for mandating arbitration in violation of § 432.6.
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.