Monday, September 19, 2016

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Employees have little if any bargaining power when they begin a new job, so when the employer makes them agree to certain limitations on their right to sue them, most employees go along with it, either not giving it much thought or never thinking in a million years that they might have to sue their employers.

The case is Patterson v. Raymour Furniture, a summary order decided on September 14. When Patterson began working for Raymours, she agreed in writing that she would participate in the Employment Arbitration Program, which says all claims go straight to arbitration and there are no class actions. So, here is the issue on appeal:

Whether EAP's prohibition of class or collective adjudication of work-related claims illegally restricts employees' substantive rights under the National Labor Relations Act and the Norris-LaGuardia Act and is unenforceable under the Federal Arbitration Act.

This is a legal issue that only a labor lawyer can love, but it can affect anyone, even you. This is so because if you have a potential case that is not worth much and you've waived the right to bring a class action that can make the lawsuit more worthwhile for a lawyer who does not have the time or resources to handle a small case, then you are out of luck and there is no lawsuit.

While the National Labor Relations Board has frowned upon waivers like this one, the Circuit courts are split on its legality. Does this mean the Second Circuit can go its own way? Yes, but it can't because the Court of Appeals has already resolved this issue. Referencing decisions from other Circuits, the Second Circuit (Lynch, Carney and Hellerstein [D.J.]) says: "If we were writing on a clean slate, we might well be persuaded, for the reasons forcefully stated in Chief Judge Wood’s and Chief Judge Thomas’s opinions in Lewis and Morris, to join the Seventh and Ninth Circuits and hold that the EAP’s waiver of collective action is unenforceable. But we are bound by our Court’s decision in Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013), which aligns our Circuit on the other side of the split."

One panel of the Court of Appeals cannot overturn a prior Second Circuit decision. Once three judges decide an issue, that case remains the law of the Circuit until the Supreme Court weighs in. That could happen here. The panel in this case notes that other Circuits have split on this issue. That makes the issue ripe for Supreme Court intervention.

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