News & Commentary

September 9, 2016

Vivian Dong

Vivian Dong is a student at Harvard Law School.

Please see OnLabor’s coverage of the 9th Circuit’s recent holding in favor of most of Uber’s driver arbitration agreements’ enforceability.

The 2nd Circuit has reaffirmed the validity of class and collective action waivers in arbitration agreements, contra the position of the NLRB.  The Circuit had previously held that such waivers did not violate the NLRA in Sutherland v. Ernst & Young LLP.  The NLRB’s official position is that class and collective action waivers violate § 7 of the NLRA, as they count as “concerted” activity (see, e.g. Amex Card Service Co., No. 28–CA–123865 (Nov. 10, 2015)).  The circuits remain split on this question.   While the 5th and 8th Circuits have overruled the NLRB on this matter – the 5th in the seminal D.R. Horton case – the 9th and 7th circuits have upheld the NLRB position.  The 9th Circuit upheld in NLRB position on August 22, 2016, in Morris v. Ernst & Young LLP.

The 9th Circuit refused to grant and en banc rehearing of their 2-1 decision in Oregon Restaurant and Lodging Association v. Perez upholding the U.S. Department of Labor’s rule that prohibits businesses from mandating that employees who receive tips pool their tips to share with the rest of the establishment.  This rule applies both to employees making below minimum wage (their tips are credited to ensure that they do make minimum wage) and employees making minimum wage and higher.  The refusal to rehear drew a sharp dissent by Judge Diarmuid O’Scannlain, who criticized the USDOL rule and the 9th Circuit’s affirmance as an abuse of administrative law.  Specifically, Judge O’Scannlain criticized the court’s endorsement of the USDOL’s authority to promulgate such rule on the basis that the FLSA was “silent” on the issue and thus presented an “invitation to regulate.”

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