Executive Summary: On April 12, 2024, the United States Supreme Court issued a decision that answers the question of whether the Federal Arbitration Act’s (FAA) exemption from arbitration for any “class of workers engaged in foreign or interstate commerce” is limited to workers whose employers are in the transportation industry. In Bissonnette v. LePage Bakeries Park St., LLC, 601 U.S. ____ (2024), the Supreme Court unanimously held that a transportation worker does not need to work in the transportation industry to be exempt from coverage under Section 1 of the FAA.
Articles Discussing Labor Arbitration.
U.S. Supreme Court Clarifies When the Federal Arbitration Act’s “Transportation Exemption” Applies
On April 12, 2024, the U.S. Supreme Court addressed whether the Federal Arbitration Act’s (FAA) transportation exemption—meaning the FAA would not apply—only relates to workers within the transportation industry. In Bissonnette v. LePage Bakeries Park St., LLC,1 the Supreme Court unanimously held Section 1 of the FAA exempts classes of
Supreme Court’s Epic Systems Decision on Arbitration Interpreted Broadly by Labor Board
An employer may lawfully issue to its employees a new or revised mandatory arbitration agreement containing a class- and collective-action waiver specifying that employment disputes are to be resolved by individualized arbitration, even if it was in response to employees opting into a collective action (such as a wage lawsuit), the National Labor Relations Board (NLRB) has ruled. Cordúa Restaurants, Inc., 368 NLRB No. 43 (Aug. 14, 2019). The NLRB also concluded that the NLRA does not prohibit an employer from threatening to discharge an employee who refuses to sign such an agreement.
NLRB Reaffirms D.R. Horton Decision Invalidating Arbitral Class Action Waivers
In a controversial decision that rejects the precedent of numerous federal and state courts, the National Labor Relations Board (NLRB) has reaffirmed its earlier decision in D.R. Horton, Inc., 357 NLRB No. 184 (2012). In D.R. Horton, the NLRB ruled that an arbitration agreement under which employees were required to waive the right to bring class or collective actions violated the National Labor Relations Act (NLRA). In the recent decision, a 3-2 NLRB majority invalidated a similar agreement, concluding that the “reasoning and result” of the Horton decision were correct. Murphy Oil USA, Inc., 361 NLRB No. 72 (2014). Two dissenting NLRB members disagreed with the decision, one observing that the majority had chosen to “double down on a mistake that, by now, is blatantly obvious.”
Eighth Circuit Court of Appeals Puts Damper on First Anniversary of D.R. Horton Decision
This month represents the first anniversary of the controversial decision by the National Labor Relations Board (NLRB) in D.R. Horton, Inc. In D.R. Horton, the NLRB ruled that D.R. Horton, a nationwide homebuilder, violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by requiring employees to sign agreements that: 1) contained a mandatory arbitration provision; and 2) required them to bring all employment-related claims to an arbitrator on an individual basis, as opposed to as a potential class action.