On January 13, 2017, the Supreme Court agreed to consider whether employee arbitration agreements containing class/collective action waivers are unlawful and unenforceable. The Court’s decision to consider this issue portends one of the more important rulings for employers in recent memory. The Court is likely to determine once and for all whether employers nationwide may use and enforce waivers to bar class/collective actions.Currently, an employer’s ability to use and enforce class/collective action waivers in employee arbitration agreements is dependent on location. For example, in Murphy Oil USA v. NLRB, the U.S. Court of Appeals for the Fifth Circuit held that employee arbitration agreements containing class/collective action waivers are valid and enforceable. However, in Epic Systems v. Lewis and Ernst & Young, LLP v. Morris, the U.S. Courts of Appeals for the Seventh and Ninth Circuits respectively held that such arbitration agreements are unlawful and unenforceable. The Supreme Court consolidated these three cases to resolve the circuit split and to decide whether employee arbitration agreements containing class/collective action waivers are unlawful under the National Labor Relations Act (“NLRA”) and whether they are unenforceable under the Federal Arbitration Act (“FAA”).
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