Decades ago, Congress passed the Federal Arbitration Act to combat the hostility courts showed towards arbitration agreements. Since that time, the Supreme Court has repeatedly pronounced the public policy in favor of the enforcement of such agreements, but lower courts have resisted enforcing them based upon a string of technicalities often created on a case-by-case basis. Over the past two years, the Supreme Court has issued two very strong opinions in favor of arbitration of class action claims, and requiring them to be arbitrated on an individual basis Those two cases were, of course, AT&T Mobility v. Concepcion, 131 S. Ct. 1740 (2011) (requiring arbitration of class claims on an individual basis), and Stolt-Nielsen v. AnimalFeeds Int'l Corp., 130 S. Ct. 1758 (2010) (arbitration cannot proceed on a class basis unless the parties have agreed to treat the claims on that basis). But the state and lower courts' treatment of those opinions has been less than uniform as several recent cases reflect.

Over the past few weeks, several courts, including the U.S. Supreme Court, have continued to grapple with these issues. In Nitro-Lift Technologies, L.L.C. v. Howard.pdf, 568 U.S. ___ (Nov. 26, 2012), the Supreme Court dealt with a case that was not a class action, but did involve issues of the enforcement of arbitration provisions. In that case, the parties entered into a covenant not to compete in an employment agreement that also contained an arbitration provision. The Oklahoma Supreme Court, however, held that as a result of its own view of the importance of state law issues, the question of the enforceability of the covenant was to be decided by a court, and not the arbitrator. The U.S. Supreme Court, in a per curiam decision, reversed and politely admonished the Oklahoma Supreme Court that in our federal system, it was obliged to follow U.S. Supreme Court authority on issues of federal law, including the FAA. This decision is significant because it reflects the tension between the FAA and the Supreme Court, which strongly support arbitration, and state courts that view arbitration agreements with distaste.

One week later, in Oxford Health Plans LLP v. Sutter, 675 F.3d 215 (3d Cir. 2012), cert. granted, Case No. 12-135 (Dec. 7, 2012), the Supreme Court accepted certiorari a case arising from the Third Circuit that presents an issue arguably not answered directly in the Stolt-Neilsen case, which is whether an arbitration clause calling for the arbitration of "all disputes" impliedly means that the disputes can be arbitrated on a class action basis as well. While this was not employment law case, the Court's ultimate holding may have serious repercussions for employers seeking to limit class action exposure through arbitration agreements. Irrespective of how the Supreme Court comes out on the issue, however, employers with concerns about class arbitrations might be advised to state expressly in the arbitration agreement that while all disputes must be arbitrated, arbitration can proceed solely on an individual basis.

Of course, the case of American Express Co. v. Italian Colors Restaurant, Case No. 12-133 (U.S.S.Ct. Nov. 9, 2012) (usually referred to as "Amex III"), relating to the arbitration of certain federal statutory rights, was accepted for certiorari in November. That case, too, can be expected to shed some light on the arbitrability of class claims, including in the employment context.

On the good news (for employers) front, last week the United States District Court for the Southern District of New York compelled arbitration of a wage and hour class/collective action dispute involving both state and federal law issues. In Cohen v. UBS Financial Services, Inc.pdf., Case No. 12 Civ 2147 (S.D.N.Y. Dec. 4, 2012), the plaintiffs worked as financial advisors for UBS, and as part of their employment they signed both arbitration agreements and class and collective action waivers. The defendant moved to compel arbitration of their claims, and asserted that they would need to proceed to arbitration individually, and not as a class. The trial court rejected a series of plaintiffs raised by the plaintiffs as to whether the agreements violated FINRA rules or the Second Circuit's AMEX III decision and compelled the arbitration of their claims on an individual basis.

The bottom line: Despite two strong United States Supreme Court opinions in the last two years, the law relating to the enforcement of arbitration agreements in the employment class action arena remains unsettled.