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United States Switches Sides in Lewis Case Pending at SCOTUS, Taking Pro-Arbitration Position Against the NLRB
Posted on Categories Arbitration, Arbitration Agreements, Federal, NewsTags , , , , ,

The Acting Solicitor General has filed an Amicus Brief in Epic Systems, set for oral argument next Term at the Supreme Court, siding with the employers challenging the anti-arbitration policies of the National Labor Relations Board (“NLRB”).

Recall that, as we reported in SAA 2017-03, the Supreme Court in January granted certiorari in Epic Systems Corp. v. Lewis, No. 16-285, as one of three cases involving whether the Federal Arbitration Act (“FAA”) prevails over the National Labor Relations Act (“NLRA”), when it comes to enforcing class action waivers in employment arbitration agreements. The issue under review: the NLRB contends that class action waivers in predispute arbitration agreements violate section 8(a)(1) of the NLRA because they interfere with the employees’ statutory right to “concerted activities” protected by section 7. The employers argue that the FAA and SCOTUS holdings require that the arbitration agreements be enforced absent a specific Congressional command to the contrary.

Upon Further Review…

The Justice Department last September filed the Petition for Certiorari on behalf of the NLRB in Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015), one of the three consolidated cases now pending at SCOTUS. DOJ later filed a Reply Brief on behalf of the Agency. In its June 16 Amicus Brief submitted by Acting Solicitor General Jeffrey B. Wall, however, the Government switches sides. The Brief admits that the DOJ in Murphy Oil “previously filed a petition for a writ of certiorari on behalf of the NLRB, defending the Board’s view that agreements of the sort at issue here are unenforceable.” Why the switch? “After the change in administration, the Office reconsidered the issue and has reached the opposite conclusion.” On deference to the Agency, the Brief adds: “Although the Board’s interpretation of ambiguous NLRA language is ordinarily entitled to judicial deference, courts do not defer to the Board’s conclusion as to the interplay between the NLRA and other federal statutes. We do not believe that the Board in its prior unfair-labor-practice proceedings, or the government’s certiorari petition in Murphy Oil, gave adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the FAA.”

No Congressional Intent to Bar Arbitration in NLRA

The Brief cites among other Supreme Court cases Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991), and CompuCredit Corp. v. Greenwood, 565 U.S. 7 (2012), which require a federal statute to expressly ban arbitration if that was the intent of Congress. Says the Brief: “Nothing in the NLRA’s legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here. The legislative record accompanying bills that became the NLRA mentioned arbitration only briefly, in stating that Congress had declined to impose mandatory arbitration or to make the Board an arbitration agency.”

Yet More Evidence of a Pro-Arbitration Trump Administration

To us, there is at this point no doubt that the Trump Administration is arbitration-friendly. As reported in SAA 2017-13, President Trump on March 27th signed into law a bill nullifying an Obama-era regulation barring companies with federal contracts valued at over $1 million from mandating arbitration of Title VII or sexual harassment or assault claims. And, as reported in SAA 2017-23, the Centers for Medicare and Medicaid Services has eliminated its reg banning predispute arbitration agreements in nursing home admission agreements, and has dropped its appeal of a District Court preliminary injunction banning implementation of the original rule. Last, as we report elsewhere in this Alert, the Department of Education published a Notice on June 16 announcing that it was postponing indefinitely the planned July 1 effective date of another Obama-era regulation, that would have banned mandatory predispute arbitration agreements and class action waivers in college enrollment agreements for schools receiving federal financial aid for student borrowers.

(ed: *This reminds us of what happened in PHH Corporation v. Consumer Financial Protection Bureau, 839 F.3d 1 (D.C. Cir. 2016), where the DOJ’s Amicus Brief filed last March ahead of the en banc oral argument held May 24th took a position against the Consumer Financial Protection Bureau (“CFPB”). Like the CFPB, the NLRB will now have to represent itself. The NLRB issued a Statement on June 16th stating that the Acting Solicitor General had given the Agency authority to represent itself. **As we reported in SAA 2017-07, the Court on February 8th advised the parties that oral argument will be held in the next Term, which begins in October.) (SAC Ref. No. 2017-24-02)

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