The Trump Administration is proving to be very much anti-worker and I fear there is more bad news on the horizon in that arena. A prime example is a recent action by the Department of Justice (DOJ). In a shocking move, the DOJ made a rare reversal of its position in a U.S. Supreme Court case by siding with employers in an amicus brief defending the legality of class waivers in arbitration agreements. The DOJ argued the exact opposite last year while representing the National Labor Relations Board (NLRB). As you may recall from prior issues, the NLRB has invalidated such provisions on several occasions.
The high court in January agreed to hear three consolidated cases involving Ernst & Young LLP, Murphy Oil USA Inc. and Epic Systems Corporation over whether arbitration agreements that prohibit employees from pursuing work-related claims as a class violate the National Labor Relations Act, as the NLRB has ruled in many cases.
One of those cases, NLRB v. Murphy Oil USA Inc., got to the high court on a certiorari petition from the labor board filed by the DOJ in the late months of the Obama Administration. But since President Trump took office, the DOJ has “reconsidered the issue and has reached the opposite conclusion,” according to a copy of an amicus brief uploaded by The Huffington Post. The brief said:
We do not believe that the board in its prior unfair-labor-practice proceedings, or the government’s certiorari petition in Murphy Oil, gave adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the [Federal Arbitration Act].
The NLRB’s previous position didn’t take into account that the FAA requires the enforcement of arbitration agreements unless they “run afoul of arbitration-neutral rules of contract validity,” the brief said. The high court was urged in the brief to reverse court of appeals decisions in the Ernst & Young and Epic Systems case, and affirm the decision in the Murphy Oil case.
The NLRB over the past few years has issued a large number of decisions invalidating arbitration agreements because they contained class waivers. Since a 2012 decision involving construction company D.R. Horton, the labor board has routinely stated that such waivers violate employees’ rights under the NLRA and are unenforceable. Those decisions were legally sound and it’s difficult to comprehend how the DOJ could reverse its position on such an important issue.
Murphy Oil has asked the Supreme Court to affirm a Fifth Circuit decision rejecting an NLRB ruling nixing its class waiver agreements with workers, and Epic Systems has asked the court to reject a Seventh Circuit decision affirming a similar adverse ruling. Ernst & Young is challenging a Ninth Circuit ruling agreeing with the NLRB’s stance.
The DOJ said in its amicus brief that enforcing arbitration agreements with class waivers doesn’t deprive employees of their rights under the NLRA, and that enforcement is required under the FAA save for certain exceptions. That is nonsense because arbitration is extremely unfair to ordinary citizens and that includes working men and women.
The cases are Ernst & Young LLP et al. v. Stephen Morris et al. (case number 16-300); NLRB v. Murphy Oil USA Inc. (case number 16-307); and Epic Systems Corp. v. Lewis (case number 16-285), before the Supreme Court of the United States.
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