Supreme Court Hears Arguments on Validity of Class Action Waivers

Employment Law

In a case where HR Policy weighed in with an amicus curiae brief supporting arbitration agreements, the U.S. Supreme Court heard oral arguments to decide whether such agreements are permissible under federal labor laws where they prohibit class action litigation.  Employers argued to the Court that only Congress can mandate a change in the Federal Arbitration Act's (FAA) reach, and that the National Labor Relations Act (NLRA) does not cover arbitration agreements.  Management attorney Paul Salvatore of Proskauer Rose LLP described this case as a "false conflict" between the FAA and the NLRA because the FAA has been routinely interpreted to promote arbitration, while the NLRA was never intended "to get into this arena whatsoever."  Plaintiff's attorneys argued that the "practical impact of a reversal of the [B]oard is enormous," and that a reversal would "strip courts of their historic power to determine discrimination and wage-and-hour violations under federal statutes."  They argued that banning class actions would amount to eliminating a primary form of concerted activity protected by the NLRA.