Dive Brief:
- In a recent decision, the United States Court of Appeals for the Seventh Circuit in Chicago agreed with the NLRB and ruled an arbitration provision violated the National Labor Relations Act (NRLA). Only one week later, the Eighth Circuit rejected this view, ruling that class arbitration waivers are permissible.
- The conflicting decisions around arbitration clauses, which basically block employees from suing employers via class action for discrimination because they must sign a binding arbitration agreement, will likely lead to a U.S. Supreme Court showdown on the issue, says one expert.
- Andrew Volin, a partner at the national law firm Sherman & Howard and an expert on wage and hours/compensation, says two conflicting decisions by Federal Courts of Appeals highlight the confusion about whether employers can require employees to arbitrate disputes, while at the same time prohibiting arbitration of claims brought on a class or collective basis.
Dive Insight:
The Epic Systems decision is significant in several respects, he explains, but it should not be read as if it cancels the ability of employers to require arbitration of employment claims. For example, employers can still require employees to arbitrate most types of common employment claims, including wage and hour claims. In fact, he says, if Epic Systems had permitted employees to arbitrate wage and hour claims as a group, if they wanted to, rather than requiring them to do individually, the outcome of the case would likely have been different.
"Companies can choose to have agreements with third parties like customers or vendors that do not permit arbitration of class-wide claims," Volin explains. "In the Seventh Circuit [Illinois, Indiana, and Wisconsin], however, companies may not impose that class claim restriction on their employees. This uncertainty will make it more difficult for national companies to implement uniform employment policies around the country."
