[JURIST] The US Court of Appeals for the Seventh Circuit [official website] ruled [opinion, PDF] Thursday that an employer may not coerce an employee to waive his or her right to bring a class action suit. In its decision, the court stated that section 7 of the National Labor Relations Act [materials] (NLRA) prevented Epic, the employer, from imposing its arbitration agreement upon its employees. The pertinent portion of the statute reads in part, “[e]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities” for mutual benefit or aid. While Epic contested that “other concerted activities,” which encompasses class-action suits, was an ambiguous phrase, the court stated that “the NLRA’s history and purpose confirm that the phrase ‘concerted activities…include resort to representative, joint, collective, or class legal remedies.” The court asserted that, even if the phrase was ambiguous, the National Labor Relation’s Board’s [official website] (NLRB) decisions regarding section 7 weigh heavily against Epic’s interpretation of section 7, and the NLRB must be given deference. Finally, the court addressed and dismissed Epic’s arguments that the Federal Arbitration Act (FAA) [text, PDF] may save its claim.

This decision creates a circuit split and may provide the Supreme Court [official website] incentive to rule on the matter. The Supreme Court has ruled in favor of arbitration with a class action waiver before, including AT&T v. Concepcion [JURIST report], a case in which the court held that states must uphold arbitration agreements with class-action waivers under the FAA, despite state law to the contrary.