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DOJ Changes Position on Class Action Waivers

(Reposted from the Labor & Employment Law Navigator Blog - Click Here to Subscribe)

Last week, the U.S. Department of Justice (DOJ) made a significant reversal in its position regarding the critical class action waiver cases pending before the Supreme Court. In January, the Supreme Court granted certiorari in three consolidated cases: NLRB v. Murphy Oil USA, Inc.Epic Systems Corp. v. Lewis; and Ernst & Young LLP v. Morris. The cases address whether employer arbitration agreements prohibiting employees from bringing or participating in class action litigation violate the National Labor Relations Act (NLRA). The Supreme Court’s decision will resolve the current circuit split on the issue.

The National Labor Relations Board (NLRB) in D.R. Horton, Inc., 357 NLRB No. 184 (2012), held that class action waivers violate the NLRA and has consistently adhered to this position, despite setbacks in some Circuits. The Sixth, Seventh, and Ninth Circuits agree with the NLRB’s position, while the Second, Fifth, and Eighth Circuits have upheld the waivers.

Under the Obama Administration, the DOJ filed a petition for a writ of certiorari on behalf of the NLRB defending the Board’s position that class action waivers are unenforceable. After the change in administration, the DOJ stated it has “reconsidered the issue and has reached the opposite conclusion.”

The DOJ’s changed stance combined with the appointment of Justice Gorsuch makes it more likely that the Supreme Court will uphold class action waivers. However, no one will know for sure until a decision is announced in late 2017 or early 2018.

The full amicus brief is available here.

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