ARTICLE
8 February 2017

Trump's SCOTUS Nomination May Impact Employee Class Waiver Agreements

FL
Foley & Lardner

Contributor

Foley & Lardner LLP looks beyond the law to focus on the constantly evolving demands facing our clients and their industries. With over 1,100 lawyers in 24 offices across the United States, Mexico, Europe and Asia, Foley approaches client service by first understanding our clients’ priorities, objectives and challenges. We work hard to understand our clients’ issues and forge long-term relationships with them to help achieve successful outcomes and solve their legal issues through practical business advice and cutting-edge legal insight. Our clients view us as trusted business advisors because we understand that great legal service is only valuable if it is relevant, practical and beneficial to their businesses.
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.
United States Employment and HR

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.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Mondaq uses cookies on this website. By using our website you agree to our use of cookies as set out in our Privacy Policy.

Learn More