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What SCOTUS Nominee Neil Gorsuch Means for Employment Class/Collective Waivers

Earlier this year, the United States Supreme Court agreed to decide whether class/collective waivers in employee arbitration agreements violate an employee’s right under the National Labor Relations Act to engage in concerted activity. The Supreme Court’s decision in that regard will resolve a split among the federal appellate courts. As President Trump’s nominee to fill Justice Scalia’s vacancy on the Supreme Court, Neil Gorsuch—a judge on the Tenth Circuit Court of Appeals—will be at the center of the class/collective waiver decision.

The Supreme Court’s current makeup of eight Justices is projected to be split on whether class/collective waivers in employment arbitration agreements infringe on employee protected activity. As the ninth Justice on the Court, to the extent he is confirmed in time to participate in the pending review, Gorsuch will likely be the swing vote on the issue.

Touted as a sharp legal mind who, like Scalia did, favors an originalism approach to Constitutional interpretation, Gorsuch is expected to be a conservative voice on the Court. As to what position employers can expect Gorsuch to take on class/collective waivers in arbitration—that remains to be seen. Gorsuch has not previously weighed in on the issue: while Federal District Courts within the Tenth Circuit have held that class/collective waivers in employment arbitration are valid and enforceable[1], the Tenth Circuit Court of Appeals has not reached the question.

Still, Gorsuch’s previous opinions may provide insight as to where he could come down on the debate. Gorsuch has participated in several decisions validating arbitration agreements and establishing a preference for arbitration. In a case involving agreements to arbitrate claims under the Fair Labor Standards Act, Gorsuch was part of the panel that reversed the District Court’s denial of a motion to compel arbitration, following that Supreme Court’s “liberal policy favoring arbitration” to hold that “all ambiguities must be resolved in favor of arbitrability.”[2] Dissenting in another opinion, Gorsuch found that the parties to a commercial transaction clearly intended to arbitrate their disputes, and he could “see no way we might rescue them from their choice.” [3] Gorsuch authored another opinion that again reversed the denial of a motion to compel arbitration, holding that where the parties dispute as to whether they agreed to arbitrate in the first insurance, the Federal Arbitration Act mandates the case to proceed summarily to trial on the proper venue, as opposed to “round after round of discovery and motions practice.”[4] And in a concurring opinion in another case, Gorsuch questioned whether it was appropriate for courts to determine the party’s intent as to the scope of their arbitration agreement, stating, “[a]ll arbitration clauses, Congress has told us, are equally valid, irrevocable, and enforceable.”[5]

Related, Gorsuch has held that administrative agencies in general have too much authority and are given too much deference, such that the agencies “swallow huge amounts of core judicial and legislative power and concentrate federal power in a way that seems more than a little difficult to square with the Constitution of the framers’ design.”[6] In a dissenting opinion, Gorsuch specifically faulted the National Labor Relations Board for exercising too much administrative power:

[I]in our legal order federal agencies must take care to respect the boundaries of their congressional charters. They may not treat similarly situated classes of persons differently without a rational explanation. And they may not depart from their own existing rules and precedents without a persuasive explanation…. Respectfully, I believe the NLRB’s new rule fails to abide each of these settled legal principles and, in that way, seeks to make new law unlawfully.[7]

While none of these previous cases directly involves the class/collective waiver issue in the context of employment arbitration, Gorsuch’s prior decisions on the validity and enforceability of arbitration agreements could indicate that he will support such waivers in employee arbitration agreements, especially if Gorsuch believes that the NLRB’s decision on class/collective waivers in employment, and the decisions of those courts that agree with the NLRB, are examples of administrative agencies having too much power, and courts giving too much deference to the agencies.

[1] See, e.g., Pollard v. ETS PC, Inc., 186 F. Supp. 3d 1166, 1179 (D. Colo. 2016) and Bell v. Ryan Transportation Serv., Inc., 176 F. Supp. 3d 1251, 1262 (D. Kan. 2016).

[2] Sanchez v. Nitro-Lift Techs., L.L.C., 762 F.3d 1139, 1146-48 (10th Cir. 2014).

[3] Ragab v. Howard, 841 F.3d 1134, 1139 (10th Cir. 2016).

[4] Howard v. Ferrellgas Partners, L.P., 748 F.3d 975, 984 (10th Cir. 2014).

[5] Chelsea Family Pharmacy, PLLC v. Medco Health Sols., Inc., 567 F.3d 1191, 1201 (10th Cir. 2009)

[6] Gutierrez-Brizuela v. Lynch, 834 F.3d 1142, 1149 (10th Cir. 2016).

[7] N.L.R.B. v. Cmty. Health Servs., 812 F.3d 768, 780 (10th Cir. 2016).

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