Arbitration Agreements Front and Center: United States Supreme Court Set to Resolve Ongoing Row over Legality of Class Action Waivers

As readers of this blog will note, we have previously noted a split among the U.S. Circuit Courts on the issue of whether class action waivers in arbitration agreements are legal or not: the Second, Fifth (see here) and Eighth Circuits have held that such waivers are legal (relying upon the Supreme Court’s holding in AT&T Mobility LLC v. Concepcion, among others), while others (including, most recently, the Ninth Circuit in Morris v. Ernst & Young, LLP), accepting the arguments of, notably, the National Labor Relations Board, have held that such waivers are not legal.  (In an opinion that is logically consistent with those of the other circuits that have held such waivers illegal, the Ninth Circuit in Morris held that Section 7 of the National Labor Relations Act (“NLRA”) and its promise of protected “collective action” renders class action waivers in arbitration unlawful—despite the lack of required “clear congressional intent” for the NLRA to trump the Federal Arbitration Act, as the Supreme Court discussed in AT&T Mobility and also in American Express Company v.Italian Colors Restaurant.)

Today, the Supreme Court granted a petition to consider, in a consolidated appeal, which Circuit’s position will prevail.

For employers, this decision to grant review, though not surprising, is absolutely critical.  If the Supreme Court agrees with the NLRB and invalidates such waivers, this would open up a window for class action litigation or class arbitration that had seemingly closed with AT&T Mobility.  This would clearly be a discouraging turn of events for employers.  Yet the current state of affairs is nearly as bad because of the degree of uncertainty regarding class action waivers: are they enforceable or unenforceable?  To say this lack of certainty makes managing employees and employment litigation difficult would be an understatement.

What comes next?  As Yogi Berra once said, “It’s tough to make predictions, especially about the future.”  This past election cycle has proven Mr. Berra correct. What we can say is that the current vacancy on the Supreme Court (and when it is filled, and who fills it) looms large for this decision.  Stay tuned.

Monte Grix

The McDonald’s NLRB Case: At The Intersection Of Hot Legal And Political Issues

Despite popular belief, the fate of fast food franchises around the country does not rest in the hands of Lauren Esposito, an unelected administrative judge for the National Labor Relations Board (NLRB).  Whatever decision Judge Esposito reaches, it will be appealed to the full NLRB and then again to a federal appeals court for review.  Continue reading

Hirschfeld Kraemer files amicus brief in suit challenging Department of Labor’s new “Persuader Rule”

The Department of Labor recently issued a final “persuader rule” under the Labor-Management Reporting and Disclosure Act (“LMRDA”).  The new rule expands the reporting and disclosure requirements of firms involved in persuader activities – where an object is to persuade employees concerning their rights to organize and bargain collectively.  Changing a long-standing understanding that indirect activities, such as drafting communication to employees, coordinating meetings and the like for employers involved in union organizing, were not covered by these reporting requirements, the new rules new expressly include planning or coordinating supervisor activity, providing persuader materials and even conducting seminars or training for supervisors or other training activity even where the consultant/lawyer does not directly meet with employees.  Both employers and lawyers would need to file disclosure statements concerning fees, content of consultation and similar information long believed to be privileged.     Continue reading

The NLRB’s “Radical” Joint Employer Decision Is The Biggest Win For Unions In Years

Yesterday, in Browning Ferris Industries of California, Inc., the National Labor Relations Board (NLRB) overruled 30 years of authority on the issue of joint employers.  In a decision which two Board Members called the “most sweeping of recent major decisions,” a slim 3-2 majority of the NLRB found that any company which has the right, whether used or unused, to “share or codetermine” the terms and conditions of employment are employers subject to its jurisdiction.  This “radical departure” from many years of decisions, if not reversed, will drastically broaden the NLRB’s mandate to thousands of new employers across the country. Continue reading

NLRB Judge Orders Reinstatement Of Employee Who Made Racist Taunts Toward African-Americans

The National Labor Relations Board promotes itself as a government agency that “safeguards employees’ rights,” but you would not know it from a recent ruling upholding racist statements made by union supporters on a picket line.  Earlier this month, in Cooper Tire & Rubber Company an administrative judge of the NLRB found that racist taunts made by strikers against African-American employees crossing a picket line were protected under the law.   Continue reading

NLRB Ratifies Pre-Noel Canning Actions

Although many suspected that the Supreme Court would invalidate all actions taken by the National Labor Relations Board in Noel Canning v. NLRB, the question remained just how many of the NLRB’s actions would stand.  To this day, the NLRB’s decisions from January 4, 2012 to August 5, 2013 have no legal effect.  That includes the NLRB’s revolutionary decisions on social media, employee handbooks, arbitration agreements and internal investigations in non-union workplaces.   Continue reading

NLRB Strikes Down “Negativity” Policy

Eighteen months ago, we reported on a slate of decisions from the National Labor Relations Board (NLRB) which struck down social media, confidentiality and other similar policies from non-union employee handbooks.  Last week we reported that, in a surprising turn, the Fifth Circuit Court of Appeals recently enforced one of those decisions in Flex Frac Logistics LLC v. NLRB.  This employer had a written confidentiality policy that prohibited the disclosure of “confidential information,” which applied to not only sensitive business information like business plans, pricing and cost schedules and other intellectual property, but also to “personnel information and documents.”  The NLRB decided—and the 5th Circuit affirmed—that the policy was overbroad because it could be read to prohibit employees from discussing their wages. Continue reading

Federal Court Enforces NLRB’s Decision To Strike Down Overbroad Confidentiality Policy

Eighteen months ago, we reported on a slate of decisions from the National Labor Relations Board (NLRB) which struck down social media, confidentiality and other similar policies from non-union employee handbooks.  In a surprising turn, the Fifth Circuit Court of Appeals recently enforced one of those decisions in Flex Frac Logistics LLC v. NLRB.   Continue reading

NLRB Judge Finds That College Football Players Are Employees Of Their University

Today, an administrative judge at the National Labor Relations Board (NLRB) found that student athletes on Northwestern University’s football team who receive a scholarship are employees of the university and therefore eligible to form a union.  The decision, while not the decision of the full NLRB, is a major departure from NLRB precedent and one very fraught with consequences for universities and other employers in educational fields. Continue reading

The NLRB Takes Another Stab At Quickie Elections

In 2011, the National Labor Relations Board issued a rule which would have allowed for so-called “quickie” union elections.  Under current rules, the time between the filing of a petition for a union election and the election itself is generally over a month, at times even longer.  Under the “quickie” rule, union elections could take place within a few weeks, putting unprepared employers at a significant disadvantage.

In 2012, the “quickie” rule was dealt a blow by a federal judge who found that the NLRB’s lack of a quorum at the time prohibited the rule from taking effect.  Late last year, the NLRB decided not to seek further review of that decision.

It was no secret why the NLRB backed down: by last year, it had five Senate-approved members, which gave it a quorum and the ability to issue the rule again.  Today, it did just that.  The Board issued a press release stating that the “quickie” election rule would be issued on February 6, 2014 and would be identical in substance to the 2011 rule.

This is bad news for employers, as the procedural mishaps which hampered the 2011 rule have been addressed and no longer exist.  In all likelihood, the rule will take effect in 2014.

What should employers do to prepare?   Employers need to ensure that supervisors know what to do when confronted with talk by employees about union activity.  The single best way to accomplish that is by conducting preventative labor relations training with supervisors so that they know the telltale signs of union activity and the best practices for confronting it.

- Dan Handman