The U.S. Court of Appeals for the Seventh Circuit has decided an employer may not coerce an employee to waive his or her right to bring a class action suit. The Court’s conclusion was based on section 7 of the National Labor Relations Act that gives employees the right to self organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for mutual benefit or aid.
The employer, Epic, claimed “other concerted activities,” which encompasses class-action suits, was an ambiguous phrase. However, the Court concluded that, even if the phrase was ambiguous, the National Labor Relation’s Board’s (NLRB) decisions regarding section 7 weigh heavily against Epic’s interpretation of section 7, and the NLRB must be given deference.
As a result of this decision there is a Federal Circuit split of opinions with regard to whether class action waivers by employees are permitted. We expect that the Supreme Court may ultimately have to decide this issue. The Supreme Court has ruled in favor of arbitration with a class action waiver before despite state law to the contrary. Therefore, before you as an employer require your employees as a condition of employment to waive their class action rights, contact legal counsel to devise legal strategies to give your company the best chance of having the employees class action waiver upheld.
The information presented is not intended to be, and does not constitute, “legal advice.” Because each situation varies, and only brief summary information is provided here, you should not use this information as a basis for action unless you have independently verified with your own counsel that it applies to your particular situation.
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