Notwithstanding repeated decisions by the U.S. Supreme Court affirming the validity of class action waivers in arbitration agreements,1 a recent circuit split and three pending cert petitions raise the specter of another challenge to such waivers specifically in the employment context. On Sept. 9, 2016, the National Labor Relations Board, joined by the U.S. Department of Justice, filed a petition for writ of certiorari with the Supreme Court, seeking review of the Fifth Circuit’s decision in Murphy Oil USA v. NLRB, 808 F.3d 1013 (5th Cir. 2015).
In Murphy Oil, the U.S. Court of Appeals for the Fifth Circuit held that a mandatory class- and collective-action waiver in an employer’s arbitration agreement did not violate the National Labor Relations Act (NLRA) because the use of class action procedures is not a substantive right under the NLRA. The NLRB argued that such waivers violate the NLRA because they deprive employees of their statutory right to engage in “concerted activities” in pursuit of their “mutual aid or protection.”
