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MONTH-IN-BRIEF (May 2018)

Business Litigation

The National Labor Relations Act (“NLRA”) Does Not Prohibit Class-Action Waiver of Wage and Hour Claims in Employment Arbitration Agreements

By Todd Lundell, Snell and Wilmer LLP

Does the NLRA’s conferred right “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” preclude enforcement of an arbitration agreement in an employment contract that waives class actions and requires individual arbitration of wage and hour claims? The Supreme Court in Epic Systems Corp. v. Lewis, __ S.Ct. __, 2018 WL 2292444 (2018), answered this question “no.” In an opinion by Justice Gorsuch, the court reasoned that “[t]he NLRA secures to employees rights to organize unions and bargain collectively, but it says nothing about how judges and arbitrators must try legal disputes that leave the workplace and enter the courtroom or arbitral forum.” The court explained that the NLRA “does not mention class or collective action procedures” and “does not even hint at a wish to displace the Arbitration Act,” which requires enforcement of arbitration agreements according to their terms. Indeed, the employees’ argument against enforcing the arbitration agreements’ class-action waivers “seeks to interfere with one of arbitration’s fundamental attributes”—that is, the “traditionally individualized and informal nature of arbitration.” Thus, the court refused to “read a right to class actions into the NLRA” that would invalidate agreements requiring individualized arbitration of employment disputes.

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