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Supreme Court Upholds Use of Class Action Waivers by Employers

On May 21, 2018, the U.S. Supreme Court approved the use of class action waivers by employers. Such a waiver requires an employee to submit employment disputes to an individual arbitration proceeding and forbids the employee from banding together with other employees to file class action lawsuits or other court claims against the employer. This was a long-awaited ruling by the U.S. Supreme Court, which was split 5-4 in deciding the case. The Supreme Court rejected the National Labor Relations Board’s argument, supported by several U.S. Courts of Appeals, that class action waivers violate the literal language of Section 7 of the National Labor Relations Act, which gives employees the right to engage in concerted activity for their own mutual aid and protection. This decision will most likely have its greatest impact on the ever-burgeoning number of wage and hour class actions claims. Employers who do not have arbitration agreements, or an agreement with such a class action waiver, would do well to consider “fixing” that issue, now that the Supreme Court has validated their use again. No change in the law is likely unless Congress decides to amend the Federal Arbitration Act. Of course, individual states can forbid the use of such waivers as a matter of state law with respect to certain kinds of state law claims.
 
If you wish to discuss some of the deeper ramifications of the Court’s decision, or for assistance in developing an employee arbitration agreement, don’t hesitate to contact us.

The Supreme Court Declines to Enter the Fray with the NLRB over Micro Bargaining Units

As the last weeks of June ticked down, the typical flurry of activity that accompanies the end of the Supreme Court’s term overshadowed the Court’s denial of certiorari in Macy’s, Inc. v. NLRB (Case No. 16-1016) on June 19, 2017, thus leaving intact the Fifth Circuit decision[1] affirming the Obama Board’s decision[2] finding a small unit of cosmetics and fragrance employees employed at a local Macy’s department store in Saugus, Massachusetts to be appropriate. As discussed more fully below, the Board in Macy’s relied on it’s prior decision in Specialty Healthcare & Rehabilitation Center of Mobile, 357 NLRB No. 83 (2011) enfd. sub. nom., Kindred Nursing Center East LLC v. NLRB, 727 F.3d 552 (6th Cir. 2013). In Specialty Healthcare, the Board sets forth the principles that apply in cases where one party, usually the employer, contends that the smallest appropriate bargaining unit must include additional employees beyond those sought in the petitioned-for unit. In Specialty Healthcare, the Board stated that “…when employees or a labor organization petition for an election in a unit of employees who are readily identifiable as a group (based on job classification, departments, functions, work locations, skills or similar factors) and the Board finds that the employees in the group share a community of interest after considering traditional criteria, the Board will find the petitioned-for unit to be an appropriate unit, despite a contention that the employees in the unit could be placed in a bargaining unit, …unless the party so contending demonstrates that employee in the larger unit share an overwhelming community of interest with those in the petitioned-for unit. 357 NLRB at 945-946 [footnotes omitted].”[3]

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