Last Friday, the US Supreme Court agreed to hear cases from the 9th, 7th, and 5th Circuits in which the courts are split on the issue whether class action waivers in employee arbitration agreements violate Section 7 of the National Labor Relations Act by inhibiting employees’ rights to engage in “concerted activity”. The NLRB has been promoting this novel theory for the past few years, under which the arbitration agreement can be invalidated notwithstanding the fact that it is otherwise enforceable under the preemptive effect of the Federal Arbitration Act. Readers of this blog will recall that the California Supreme Court rejected that theory in Iskanian v. CLS. The defendant in that case argued that a class action does not necessarily involve “concerted” action at all. A class action merely requires one employee with a complaint and a lawyer to file the case. Only in the world of legal fiction can such a case automatically constitute “concerted activity”. That legal fiction is a far cry from the scenario — several employees standing around the water cooler griping about wages and talking about unions and strikes — envisioned by Congress in 1935 when the phrase “concerted activity” was coined.
Now, the US Supreme Court will settle the issue, and the lower courts and particularly the NLRB will finally be bound by the result. The cases will be briefed and argued later in the year. By then, there will likely be a full complement of nine Justices on the Court. The current Court may be split 4-4 on this issue. The new Justice, assuming she or he is confirmed over what is likely to be fierce opposition in the Senate, will thus probably be the deciding vote in these cases. The cases are Morris v. Ernst&Young (9th Cir.), Lewis v. Epic Systems (7th Cir.), and Murphy Oil v. NLRB (5th Cir.). In these cases, and other employment cases likely to come before the Supreme Court in the near future, the stakes are high and the issues profound. As we have said before, what a difference an empty chair makes.
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