Who’s Afraid of Collective Action?

The law of the workplace is in the midst of a critical debate about collectivity.

In case after case courts and the National Labor Relations Board have fought over the availability of collective action in two areas relevant to workers: class actions and class arbitration.  (Union rights and collective bargaining represent a third area, but the debate over this kind of collective action is beyond the scope of this post.)  These forms of collective legal action have been considered legitimate legal tools at one point, so why has recent law undercut workers who band together to use those tools?

Class Actions

Class actions can be an important vehicle for the assertion of workers’ group power, but courts have made it much more difficult for plaintiffs to bring successful class actions.

Most notably, Wal-Mart Stores, Inc. v. Dukes decertified a class of Wal-Mart employees who sought to bring Title VII claims against the store by heightening long-established Rule 23 commonality requirements.  This change benefited Wal-Mart’s purposely decentralized, discretionary management structure, which ensured that no “common answer” existed to class-wide questions about allegedly discriminatory employment decisions.  While subsequent class action decisions have narrowed the heightened commonality standard embraced by Wal-Mart, the case showed at least five justices’ hostility toward the use of the class action tool by employees attempting to act collectively.

Additionally, other class action cases have increased the evidentiary burden a putative class representative must meet prior to class certification, resulting in a “front-loading” of the class action litigation process that imposes exceptional costs on representatives who cannot share costs prior to certification.

But something interesting has happened at the Supreme Court this term.  In a surprising turn on the commonality question, last week the Supreme Court ruled 6-2 in favor of a class of employees in Tyson Foods, Inc. v. Bouaphakeo, upholding the lower court’s finding of commonality on a donning-and-doffing question despite differences in the gear worn by the employees involved.  And the Court’s other class action decision this term, Campbell-Ewold Company v. Gomez, held that an unaccepted settlement offer does not moot a putative lead plaintiff’s class.  Nonetheless, the bulk of recent case law is against the use of collective action in the courts, so it remains to be seen whether these recent cases are the start of a trend that is friendlier to collectivity or whether Tyson Foods and Campbell-Ewold are outliers.

Class Arbitration

What’s more, the majority of recent case law is also against the use of collective action outside of courts—in arbitration.  In case after case the Supreme Court has used the Federal Arbitration Act to uphold waivers of class arbitration rights in agreements found unconscionable under state law.  As many commentators have noted, these cases empower employers to prohibit virtually all forms of collective legal action.

Recent NLRB Protection of Collective Action

Though the courts have acted to undermine collective action for workers, recent NLRB activity has pushed back against this trend.  As described in detail on this blog, the NLRB has clashed with the Fifth Circuit in a series of cases regarding the validity of class action waivers in mandatory arbitration agreements under the NLRA.

First, in D.R. Horton, the NLRB held the Board invalidated such an agreement on the ground that workers have an unwaivable “right to collectively pursue employment-related claims” as part of the Section 7 right to “engage in…concerted activities for the purpose of…mutual aid or protection.”  That is, the same section of the NLRA that protects collective bargaining also creates a substantive right for workers to pursue legal action against their employers collectively.  This substantive federal right cannot be waived, even under the Supreme Court’s pro-arbitration precedent.  But the Fifth Circuit denied enforcement of the Board’s decision, reframing the right to collective legal action as purely procedural (despite the NLRA’s guarantee of collective legal action in the workplace context) and so waivable.

The Board refused to follow the Fifth Circuit in its next case on mandatory arbitration agreements, Murphy Oil.  The Board rejected the Circuit Court’s framing of collective legal action as a purely procedural right as violating  “the long-established understanding of the Act and national labor policy. . . . [T]he right to engage in collective action—including collective legal action—is the core substantive right protected by the NLRA.”  But once again the Fifth Circuit denied enforcement.

As Andrew Strom detailed, this battle is far from over.  The Board’s numerous decisions on class action waivers in mandatory arbitration agreements confirm that it will not back down from its defense of collectivity, and it recently found support in a California district court decision invalidating a collective action waiver.  But the big question is whether the Board will be able to find a Circuit Court willing to enforce its decisions and, then, whether the Supreme Court will address the issue.  Considering the Supreme Court’s general hostility toward collectivity (with the exception of this term’s cases), perhaps workers are better off avoiding such a confrontation.


The law’s recent hostility toward collectivity is evident in both class actions and class arbitration.  Though the exact connection between the similar trends in these areas of the law is unknowable, a factor worth considering is the pro-business orientation of the Roberts Court others have noted.

Chief Justice Robert’s concurrence in last week’s Tyson Foods furthered this trend, as it significantly tempered his support for the pro-collectivity decision.  Though he joined the majority in its decision to allow the district court to determine how to distribute an aggregate award only to those class members who were actually injured, he seriously doubted the lower court’s ability to do so.  More significantly, he seemed to distance himself from the majority’s criticism of the employer’s role in creating this problem: “The Court observes in dicta that the problem of distributing the damages award ‘appears to be one of petitioner’s own making.’  Perhaps.  But Tyson’s insistence on a lump-sum jury award cannot overcome the limitations placed on the federal courts by the Constitution.”

In light of the business and worker interests at stake in the future of collective action, the NLRB’s next steps merit serious attention.

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