Dive Brief:
- EY can no longer bar employees from their right to pursue work-related claims together via class action litigation, a federal appeals court has ruled, giving a big lift to the U.S. National Labor Relations Board's efforts to curtail the use of class action waivers, according to Reuters.
- Reuters reports that employers have increasingly begun to use arbitration clauses in employment contracts which basically force workers to arbitrate claims individually as a way to avoid the cost of litigating class actions.
- The NLRB also has disallowed such anti-class action provisions adopted by dozens of employers, including American Express Co, Citigroup Inc, and Domino's Pizza Inc, among others, Reuters reports.
Dive Insight:
The 9th U.S. Circuit Court of Appeals in San Francisco ruled 2-1 against EY, making it the second appellate court to support the NLRB's position that federal labor law prohibits workers' arbitration agreements from including class action waivers. On the other hand, two appellate courts have rejected the NLRB’s view, making it likely that the U.S. Supreme Court will eventually rule on the issue.
As noted by the conflicting decisions, the controversial workplace arbitration clause issue is far from determined, but the NLRB is focused on taking the option out of the hands of employers nationwide. At the same time, smaller employers are starting to look at such arbitration provisions to protect themselves from litigation. However, it may not work out due to the NLRB's tenacity, until of course the U.S. Supreme Court decides to hear the case.
