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FMG Law Blog Line

On Second Thought, DOJ Now Supports Class Action Waivers

Posted on: June 23rd, 2017

By: Timothy J. Holdsworth

As we predicted might happen in an earlier blog, the Supreme Court granted certiorari to resolve a split among circuits about whether arbitration agreements containing class and collective action waivers violate the National Labor Relations Act (“NLRA”) and are unenforceable under the Federal Arbitration Act (“FAA”).

Although the Supreme Court has not yet ruled on the matter, the case has had some interesting developments thus far. The U.S. Department of Justice (“DOJ”), under the previous presidential administration, had filed a petition for a writ of certiorari on behalf of the National Labor Relations Board, defending the Board’s view that such agreements were unenforceable. The DOJ has now made an about-face and filed an amicus brief supporting class action waivers. The DOJ acknowledged its earlier position, but says it has “reconsidered the issue and has reached the opposite conclusion.” Now the DOJ asserts that the Board’s conclusion as to the interplay between the NLRA and FAA is not entitled to deference and the Board did not give “adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the FAA.”

The DOJ’s new position is a welcome surprise for employers wishing to use these waivers to limit time-consuming and expensive class and collective action litigation, and creates a unique situation where different branches of the federal government now find themselves on opposite sides of oral argument before the Supreme Court.

For more information, please contact Tim Holdsworth at [email protected].

 

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