Department of Justice Changes Stance on Class Action Waivers in Favor of Employers
In a fascinating turn of events, the United States Department of Justice (“DOJ”) switched sides in a critical pending Supreme Court case last Friday. The three consolidated cases—National Labor Relations Board v. Murphy Oil USA, Case No. 16-307, Epic Systems Corp. v. Lewis, Case No. 16-285 and Ernst & Young LLP v. Morris, Case No. 16-300—have been closely watched as the Supreme Court is expected to resolve a growing circuit split over whether an employment contract that requires an employee to waive his or her right to bring or participate in a class action violates the National Labor Relations Act (“NLRA”). The NLRA protects employees’ rights to engage in concerted activity concerning wages, hour and working conditions. Employers are increasingly relying on such waivers, which are an effective way to avoid costly class action litigation. To read a more in-depth analysis of this pending case, click here. Jackson Lewis represents Murphy Oil before the Supreme Court.
Under the Obama Administration, the government had defended the NLRB’s position that class action waivers violated the NLRA and were unenforceable. Now, under President Trump, the DOJ has reversed course. In an amicus curiae brief filed on Friday, DOJ expressly acknowledged that it had “previously filed a petition…on behalf of the NLRB, defending the Board’s view” that class action waivers were unenforceable, but stated that “[a]fter the change in administration, the [DOJ] reconsidered the issue and has reached the opposite conclusion.”
Of course the change does not guarantee that the Supreme Court will agree with DOJ. It does, however, appear to make that outcome more likely – especially given the recent appointment of Justice Gorsuch to the Court, breaking an ideological stalemate. To read more on Justice Gorsuch’s judicial philosophy, click here.