Supreme Court Will Review Enforceability of Class Action Waivers

01.26.2017

The U.S. Supreme Court recently announced that it would review whether, as a condition of employment, employers can require employees to sign arbitration agreements that contain a waiver of the employees’ right to participate in class and collective actions.­ 

In 2012, the NLRB decided that such class action waivers violated employees’ rights.  Federal courts around the country, however, have not been in agreement on this issue.  ­The Second Circuit Federal Court of Appeals, which governs federal claims brought in New York and several surrounding states, decided that arbitration agreements that contained the waivers were enforceable.

Given the split around the country, the Supreme Court’s decision will provide certainty to employers on this issue.  It will also give employers a chance to see how President Trump’s choice for Supreme Court, likely to be on the bench by the time this matter is decided, will decide employment-related cases.