Employers cannot compel employees to sign employment contracts binding them to arbitrate their disputes individually and waive their right to collective action, Maryland’s attorney general wrote in papers filed with the U.S. Supreme Court.
The justices have long held that the National Labor Relations Act acknowledges workers’ “fundamental right” to engage “in concerted activities” for their “mutual aid or protection,” Brian E. Frosh wrote Wednesday, quoting from the Supreme Court’s 1937 decision in National Labor Relations Board v. Jones & Laughlin Steel Corp. This right supersedes provisions of the Federal Arbitration Act that have been construed as enabling employers to require employees to submit claims individually to arbitration without recourse to class action, Frosh said in the brief joined by attorneys general from 15 other states and the District of Columbia.
Frosh submitted the brief to the Supreme Court as it considers whether the NLRA’s provision for collective employee action is trumped by the FAA’s allowance for employers to require an arbitration waiver of that right as a condition of employment. The justices will hear arguments in the dispute Oct. 2, the first day of their 2017-2018 term.
“The states and the federal government have long recognized that employees need the right to join together in concerted activities and should not be forced to sign away that right just to earn a living,” Frosh wrote in the friend-of-the-court brief supporting employees and the National Labor Relations Board in their high-court battle against employers. “The employers’ interpretation of the Federal Arbitration Act would render these protections meaningless whenever an arbitration agreement is at issue. That is not what Congress intended.”
Frosh’s argument stands in stark contrast to the Trump administration’s.
In a competing friend-of-the-court brief, acting U.S. Solicitor General Jeffrey B. Wall said “nothing in the NLRA’s legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue” before the high court.
“The FAA’s strong presumption in favor of enforcing arbitration agreements may yield where Congress itself has overridden that presumption in another statute,” added Wall, President Donald Trump’s chief attorney before the high court. “The legislative record accompanying bills that became the NLRA mentioned arbitration only briefly, in stating that Congress has declined to impose mandatory arbitration or to make the board an arbitration agency.”
Arguments like Frosh’s succeeded in the 7th and 9th U.S. Circuit Courts of Appeal, which ruled in favor of employees challenging waivers in the arbitration agreements they signed with employers Epic Systems Corp. and Ernst & Young LLP. Those circuit courts, based in Chicago and San Francisco, respectively, contrasted with the New Orleans-based 5th Circuit, which held – as Wall argues – that the waiver is valid in ruling for Murphy Oil USA Inc. in its legal fight with the NLRB.
The Supreme Court has consolidated the three cases for the argument. The cases are docketed as Epic Systems Corp. v. Jacob Lewis, No. 16-285; Ernst & Young LLP v. Stephen Morris, No. 16-300; and National Labor Relations Board v. Murphy Oil USA Inc., No. 16-307.
Frosh was joined in the brief by the attorneys general of California, Connecticut, Delaware, Illinois, Iowa, Massachusetts, Minnesota, New York, North Carolina, Oregon, Pennsylvania, Rhode Island, Vermont, Virginia and Washington.
Frosh’s brief was cosigned by Maryland Solicitor General Steven M. Sullivan and Assistant Maryland Attorney General Patrick B. Hughes, the counsel of record before the high court.