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DirecTV Supreme Court Ruling Sets Stage for NLRB Battle Over Class Action Waivers

Class action waivers combined with arbitration provisions continue to be a hot-button issue both in the courts and before federal administrative agencies. Most recently, with its ruling in DirecTV, Inc. v. Imburgia, et al., on Monday, December 14, 2015, the United States Supreme Court again held that the Federal Arbitration Act (“FAA”) trumps state laws prohibiting arbitration. This bolstered its previous ruling in AT&T Mobility v. Concepcion, 563 U.S. 333 (2011), in which the Supreme Court found that, under the FAA, businesses could use standard-form contracts containing arbitration agreements with class action waivers to forbid consumers from banding together in a single arbitration. The Concepcion decision also held that the FAA trumped state law that forbid mandatory arbitration and class action waivers as unconscionable. Read More ›

Sixth Circuit Limits Enforcement of Key Employment Contractual Waivers in FLSA Cases

Over the past few years, there has been considerable litigation over whether employees may contractually waive their right to bring class or collective actions against their employers.  For example, the NLRB in its D.R. Horton line of cases believes that arbitration agreements limiting employees in their right to bring collective or class actions are not enforceable since they arguably waive an employee’s Section 7 right to engage in concerted activities. The courts have not agreed with the NLRB, and applying the Supreme Court’s recent line of cases upholding arbitration agreements proscribing class relief, have held that the congressional support for arbitration vis-à-vis the Federal Arbitration Act is a stronger policy than other rights relating to the ability to seek class relief. Further, the courts have construed the FAA to hold that unless an arbitration agreement clearly permits the seeking of class relief through arbitration, such relief is not available – through arbitration or otherwise. See generally Owen v. Bristol Care, Inc., 702 F.3d 1050, 1054-55 (8th Cir. 2013)(arbitration agreement containing class action waiver is enforceable in claim brought under FLSA); Sutherland v. Ernst & Young LLP, 726 F.3d 290, 295-96 (class action waiver must be enforced pursuant to the U.S. Supreme Court’s decision in American Express Co. v. Italian Colors Restaurant, 133 S.Ct. 2304 (2013)); Parisi v. Goldman, Sachs & Co., 710 F.3d 483, 486 (2d Cir. 2013) (undisputed that arbitration agreement did not provide for arbitration agreement on class-wide basis); Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326, 1134-36 (11th Cir. 2014) (arbitration agreement which waives collective claims is enforceable); D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 558-61 (5th Cir. 2013) (class and collective action waivers are not inconsistent with the NLRA’s Section 7 concerted activity protections, and therefore such waivers in arbitration agreements between employers and employees are enforceable); Reed Elsevier, Inc. v. Crockett, 734 F. 3d 594, 600 (6th Cir. 2013) (where agreement is silent on the availability of class relief through arbitration, class relief is not available). See also Huffman v. The Hilltop Companies, LLC, 747 F.3d 391, 398 (6th Cir. 2014) (contract silent on right for bringing class claim in arbitration precludes the arbitration of class claims).   Read More ›

Class Action Waivers In California: New Pro-Employer Appellate Court Decision Generates Shock Waves

The California Court of Appeal recently issued a decision which opens the door to class-action waivers in employment arbitration agreements in California.  Iskanian v. CLS Transp. Los Angeles, LLC, ___ Cal. Rptr. 3d ___,  (Cal. Ct. App. June 4, 2012)—is a putative class action alleging, among other things, that the defendant failed to pay overtime and provide required meal and rest breaks. The named plaintiff, Iskanian, signed an arbitration agreement containing a class and representative action waiver, which read:

[E]xcept as otherwise required under applicable law, (1) EMPLOYEE and COMPANY expressly intend and agree that class action and representative action procedures shall not be asserted, nor will they apply, in any arbitration pursuant to this Policy/Agreement; (2) EMPLOYEE and COMPANY agree that each will not assert class action or representative action claims against the other in arbitration or otherwise; and (3) each of EMPLOYEE and COMPANY shall only submit their own, individual claims in arbitration and will not seek to represent the interests of any other person.

On June 4, 2012, the California Court of Appeal in Iskanian upheld the terms of the arbitration agreement, including the class action waiver, affirming the order of the trial court compelling arbitration and dismissing the (previously-certified) class claims.  In so doing, the Court rejected 10 years of California anti-arbitration rulings that discouraged class action waivers and invalidated arbitration agreements as unconscionable for failure to follow certain rigid requirements. Read More ›