News & Insights

Nlrb Seeks Supreme Court’s Intervention To Resolve Circuit Split Over Enforceability Of Arbitration Agreements Prohibiting Class Action

The National Labor Relations Board filed a petition for certiori earlier this month asking the United States Supreme Court to consider the enforceability of class-action waivers in employee arbitration agreements.  The arbitration agreements at issue are those that require employees to waive their right to bring or join a class action, instead requiring the employees to submit to individual arbitration.  The NLRB’s position is that such agreements are invalid because they are contrary to the National Labor Relations Act’s protection of concerted activity.  However, the NLRB’s position runs against strong federal policy favoring arbitration.  Several circuits have weighed in on this issue, creating a split that makes the matter ripe for Supreme Court review.  If the Supreme Court accepts review, a ruling that sides with the NLRB would significantly impact existing arbitration agreements.  Employers relying on arbitration agreements that prohibit class actions should be prepared to revise and re-execute arbitration agreements with employees depending on the Court’s ruling