Burr Alert: Employers May Include Class Waivers in Arbitration Agreements

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Since January 2012, employers nationwide have had to grapple with uncertainty about whether they can include class-action or collective-action waivers in their employment-arbitration agreements. Today, the U.S. Supreme Court resolved that uncertainty-they can. In a 5-4 decision, the Court held that including those waivers is not a violation of the National Labor Relations Act (NLRA) and the Federal Arbitration Act (FAA) requires courts to enforce those waivers in arbitration agreements according to their terms.

In January 2012, the National Labor Relations Board (NLRB) issued the In re D. R. Horton, Inc. decision, holding that agreements requiring only individual arbitration-that is, barring class or collective arbitration-violated the NLRA and were an unfair labor practice. Since then, the NLRB has continued to hold that employers commit unfair labor practices by requiring their employees to sign arbitration agreements that include class-action or collective-action waivers. And the courts have divided over whether to uphold the NLRB's conclusions and whether to enforce the agreements.

Eventually, three cases made their way to the U.S. Supreme Court. The Court consolidated them, with Epic Systems Corp. v. Lewis from the Seventh Circuit as the lead case. In a decision issued today, the Court held that employers can include class-action and collective-action waivers in arbitration agreement with their employees. Justice Ginsburg, joined by Justices Breyer, Sotomayor, and Kagan dissented.

Download the full article, "Burr Alert: Employers May Include Class Waivers in Arbitration Agreements" written by Travis E. Ramey.

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