Trump’s SCOTUS Nomination May Impact Employee Class Waiver Agreements

30 January 2017 Labor & Employment Law Perspectives Blog
Author(s): Patrick J. McMahon

President Trump is not wasting any time acting on several of his campaign promises. Whether or not the administration’s actions align with those campaign promises, however, is yet to be seen.

On January 24, 2017, President Trump announced he would reveal his nomination for the vacant ninth seat on the Supreme Court. Trump has consistently said he will fill the seat with a judge sharing similar views to that of late Justice Antonin Scalia, who was known for his conservative opinions. The selection would break what many view to be an even liberal-conservative split on the Court. However, depending on the confirmation process, this yet-to-be revealed ninth justice may not even have a chance to impact a significant issue that has plagued employers since 2012.

One particularly important issue for employers is the Court’s treatment of employee arbitration agreements and an employer’s ability to require employees to waive their right to bring class or collective actions.  The Supreme Court recently agreed to hear a series of cases that will decide whether the National Labor Relations Board (NLRB) is correct in its interpretation that federal labor laws prohibit employers from including class action waivers in employee arbitration agreements. While the NLRB has consistently found such agreements to be illegal, a circuit split has developed across jurisdictions. In the three collective cases the Supreme Court has agreed to hear, the Fifth Circuit overturned the NLRB’s decision and found a class waiver agreement valid. The Ninth and Seventh Circuits, however, sided with the NLRB — finding such agreements unlawful. The Supreme Court’s resolution of this matter will not only significantly impact employers, but will also provide a welcomed resolution to an otherwise unpredictable landscape.

The Supreme Court’s current composition lends itself to an even 4-4 split. If Chief Justice Roberts believes that is the mostly likely outcome, he could decide to hold the case for an additional term with the expectation the ninth justice would be seated by then. But not all experts are confident that the current Court would break evenly on this issue. Justice Kennedy, often known as a swing vote on the high court, sided with a conservative opinion written by Justice Scalia the last time the Court took on arbitration agreements, albeit in a business/consumer context rather than employer/employee. But, some legal professionals doubt Justice Kennedy would again take such a hard line enforcing arbitration agreements. This would lead to a 5-3 opinion (against enforcement) making President Trump’s pick inconsequential.

The potential impacts on employers are significant. If the Supreme Court invalidates class waivers, employers are at risk of facing costly class or collective action lawsuits in a variety of contexts. The guarantee of resolving employee disputes in an individual arbitral forum has offered employers a means of achieving more cost-efficient and private resolution of employee disputes. Without the tool of class waivers, employers may be vulnerable to these types of attacks in the future.

This blog is made available by Foley & Lardner LLP (“Foley” or “the Firm”) for informational purposes only. It is not meant to convey the Firm’s legal position on behalf of any client, nor is it intended to convey specific legal advice. Any opinions expressed in this article do not necessarily reflect the views of Foley & Lardner LLP, its partners, or its clients. Accordingly, do not act upon this information without seeking counsel from a licensed attorney. This blog is not intended to create, and receipt of it does not constitute, an attorney-client relationship. Communicating with Foley through this website by email, blog post, or otherwise, does not create an attorney-client relationship for any legal matter. Therefore, any communication or material you transmit to Foley through this blog, whether by email, blog post or any other manner, will not be treated as confidential or proprietary. The information on this blog is published “AS IS” and is not guaranteed to be complete, accurate, and or up-to-date. Foley makes no representations or warranties of any kind, express or implied, as to the operation or content of the site. Foley expressly disclaims all other guarantees, warranties, conditions and representations of any kind, either express or implied, whether arising under any statute, law, commercial use or otherwise, including implied warranties of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Foley or any of its partners, officers, employees, agents or affiliates be liable, directly or indirectly, under any theory of law (contract, tort, negligence or otherwise), to you or anyone else, for any claims, losses or damages, direct, indirect special, incidental, punitive or consequential, resulting from or occasioned by the creation, use of or reliance on this site (including information and other content) or any third party websites or the information, resources or material accessed through any such websites. In some jurisdictions, the contents of this blog may be considered Attorney Advertising. If applicable, please note that prior results do not guarantee a similar outcome. Photographs are for dramatization purposes only and may include models. Likenesses do not necessarily imply current client, partnership or employee status.


Related Services