PPB October 2018

O n May 21, the Supreme Court issued a split 5-4 decision (along party lines) regarding the enforcement of arbitration agreement clauses prohibiting employees from seeking class or collective action for certain employment claims— in this case, Fair Labor Standards Act (FLSA) claims. The decision consolidated three cases ( Epic Systems Corp. v. Lewis, NLRB v. Murphy Oil Co. and Ernst & Young LLP v. Morris ) with conflicting decisions in different circuits of the U.S. Circuit Court of Appeals. In these cases, arbitration agreements required employees to submit their wage and hour claims to binding arbitration and to do so on an individual basis. In previous decisions, the Sixth, Seventh and Ninth Circuit courts agreed with employees who claimed arbitration provisions violated the National Labor Relations Act (NLRA) because they prohibited class actions and denied workers the right to engage in “protected concerted activities” for their mutual aid and protection. Conversely, the Second, Fifth and Eighth Circuit courts agreed with employers who argued the Federal Arbitration Act (FAA) allows enforcement of arbitration agreements as written except on very narrow grounds, such as fraud. In writing the majority’s decision, Justice Neil Gorsuch explained that Congress has instructed federal courts to The U.S. Supreme Court’s Latest Decision On Arbitration And What It Means For You by Paige McAllister, SPHR Arbitration Agreements Revisited 84 | OCTOBER 2018 | THINK