4/30/2018. An Epic Struggle: Class Action Waivers Hang in the Balance. The Question Before The Court

Transcription

1 An Epic Struggle: Class Action Waivers Hang in the Balance Hon. James T. Giles (Ret.), Of Counsel, Blank Rome LLP Anthony B. Haller, Partner, Blank Rome LLP Friday, April 27, 2018 The Question Before The Court Does the National Labor Relations Act (NLRA) trump the Federal Arbitration Act (FAA), and as a result preclude class action waivers in employee arbitration agreements, permitting compulsory individualized arbitration of wage and hour demands? Are exempt workers exempt from today s discussion? 2 Is There A Conflict? Arbitration agreements shall be enforced by their terms!! It s an unfair labor practice to restrain employees in the exercise of their collective action rights! 3 1

2 The Arguments Before The Court The Solicitor General/The Employers The Court s cases lay out a clear path favoring arbitration. FAA says arbitration agreements should be enforced by their terms unless Congress says otherwise; Congress has been silent. The NLRA does not specify employee class actions and therefore the FAA controls the question presented. Once you get to the forum, you re bound by the forum rules. The Court chose the FAA when similar issues arose. The NLRB/The Employees There is long standing precedent of barring contracts that interfere with collective rights. NLRA Sections 7 & 8 create non waivable substantive rights. There is no conflict b/c FAA saving clause makes room for NLRA. Employers coerce employees into signing yellow dog contracts contrary to the Norris LaGuardia Act (Section 2) and the NLRA. 4 Epic Oral Argument 1 5 Epic Oral Argument 2 6 2

3 Epic Oral Argument 3 7 Epic Oral Argument 4 8 Epic Oral Argument 5 9 3

4 If I Were Counsel For The Employers, I Would Argue The SC explained in CompuCredit Corp. v. Greenwood that the FAA establishes a presumption in favor of arbitration agreements that can only be overcome by a contrary congressional command. In AT&T v. Concepcion, the SC rejected the argument that the class action waivers had an unlawful objective and held the FAA preempted a state law that barred these agreements. 10 If I Were Counsel For The Employers, I Would Argue There is no command here. Modern class practice started in The NLRA was passed in Class practice is not at the heart of the NLRA. Congress could not and did not consider it at the time. Class or collective action is not a substantive right under the NLRA. The SC has repeatedly held that class and collective actions are only procedural rights. 11 If I Were Counsel For The Board/Employees, I Would Argue First off, the Board s views are subject to deference under Chevron USA v. Natural Res. Def. Counsel. The broad language used by Congress in drafting the NLRA suggested they wanted it to apply to future collective activities. An employee s right to join a union is protected but so is his/her right to participate in other concerted activities for mutual aid or protection. 12 4

5 If I Were Counsel For The Board/Employees, I Would Argue There is no clash with the FAA because the FAA text reads that it is inoperable when reason exists in law or equity for the revocation of contract. Here, these contracts are illegal under the NLRA. In Concepcion and other cases, the clash was direct. Here, there is only a clash of judicial making. The NLRA makes clear that Section 7 is substantive and lies at the heart of restructuring the employee/employer relationship. 13 If I Were Counsel For For employers, I respectfully submit that For employees, I respectfully submit that 14 Our Thoughts/Where Is The Court Going? 15 5

6 The Prediction Game: Where Do The Justices Seem To Be After Oral Argument? Employers Employees/The Board Silence 16 Discussions/Implications Counsel for one of the employees claimed that this ruling could invalidate 25 million employment agreements. Is that right? If so, would class wide arbitration increase? If these agreements are allowed, will companies make these agreement more widespread? Would the way they present the agreements change? Does it matter if it s an arbitration agreement or a simple waiver? 17 Conclusion And How To Reach Us Hon. James T. Giles Of Counsel Business Litigation jgiles@blankrome.com Anthony B. Haller Partner Labor & Employment haller@blankrome.com