Arbitrator and NAA member, John Kagel provides a brief summary of a recent decision by the Sixth Circuit Court of Appeals dealing with the issue of class arbitration waivers.
Joining other Circuits, the Sixth Circuit has upheld the NLRB’s position that an individual employment contract requiring all disputes to be decided by arbitration between an individual and his employer, but prohibiting the employee from joining with other employees in litigation against the employer violates the National Labor Relations Act (NLRA). That Act provides as a substantive right, the majority of the Court held, that of employees to engage in collective activity with respect to work related issues. NLRB v. Alternative Entertainment Inc., (May 26, 2017)
The Seventh and Ninth Circuits have similarly decided while the Fifth Circuit held to the contrary. The issue to resolve the split among the federal circuit courts of appeals of whether to uphold the NLRB’s position that such class arbitration waivers are prohibited under the NLRA or to allow them under the Federal Arbitration Act is currently before the United States Supreme Court for its October 2017 term.