The United States Supreme Court has issued a decision wherein it has stated that employers may require employees to bring their employment-related claims through arbitration on an individual level as opposed to through a class and collective action.
The National Labour Relations Board (NLRB) has an extensive history of disagreement with employers regarding the provisions of the National Labour Relations Act (NLRA). Employers in the US have frequently opposed the NLRB’s stance that the legislation prevents employers from making employees waive their rights to class and collective action in employment dispute cases in order to bring their claims individually through arbitration.
The Court made its ruling against the background of three separate cases involving challenges made by employees in relation to the arbitration procedures used by their employers; Epic Systems v Lewis, Ernst & Young v Morris and NLRB v Murphy Oil USA, Inc. In each of these cases, the employees contended that Section 7 of the NLRA protected their right to engage in class or collective action against their employers, and that the arbitration agreements put in place by their employers were interfering with these rights.
Under these arbitration agreements, the employees were required to use arbitration as the only recourse for employment disputes, and were prohibited from partaking in class or collective litigation with their colleagues. It was contended by the NLRB and the employees involved in these cases that such agreements, while supported under the Federal Arbitration Acts (FAA), were in violation of the NLRA.
The employers maintained that the remedy of individual arbitration agreements provided for in the FAA should apply, and that the NLRB’s interpretation regarding the requirement of individual action and the legality of such conditions was extraneous, as the Board did not have sufficient knowledge of these practices to support this interpretation.
The Supreme Court ruled in favour of the employers in each case. It was held that both the text and the context of the NLRA did not provide for class or collective actions. The Court stated that the Federal Rules of Civil Procedure and the Fair Labour Act instead covered these collective procedures. The Court found that Section 7 of the NRLA only applies to actions that employees ‘‘just do themselves’’ and does not refer to disputes that ‘‘leave the workplace and enter a courtroom or arbitral forum.’’ Therefore, it was deemed that there was no conflict between the FAA and the NLRA.
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