Last Friday, the U.S. Department of Justice (DOJ), in a rare move, changed its position in a class waiver case pending before the U.S. Supreme Court. On Jan. 13, 2017, the Court granted certiorari in three consolidated cases to resolve whether arbitration agreements with class and collective waivers are enforceable under the Federal Arbitration Act (FAA) despite the National Labor Relations Board’s (NLRB’s) current interpretation of Sections 7 and 8 of the National Labor Relations Act (NLRA). We have extensively covered the lengthy run-up to the cases involving Epic Systems Corp., Ernst & Young and Murphy Oil USA Inc., including the grant of certiorari, in a Jan. 17, 2017, blog here and a subsequent Sixth Circuit opinion in a June 1, 2017, blog.
The consolidated cases include one involving the NLRB, NLRB v. Murphy Oil USA, Inc., No. 16-307. Initially the deputy solicitor general, Edwin S. Kneedler, was counsel of record on the certiorari petition in Murphy Oil filed on Sept. 9, 2016. But on June 16, that position changed in the DOJ’s amicus, or “friend of the court,” brief with Jeffrey B. Wall, acting solicitor general, as counsel of record. The brief described the basis for the office’s “reconsideration” after the new administration took office:
Although the Board’s interpretation of ambiguous NLRA language is ordinarily entitled to judicial deference, courts do not defer to the Board’s conclusion as to the interplay between the NLRA and other federal statutes. We do not believe that the Board in its prior unfair-labor-practice proceedings, or the government’s certiorari petition in Murphy Oil, gave adequate weight to the congressional policy favoring enforcement of arbitration agreements that is reflected in the FAA.
Moreover, the DOJ’s amicus brief contested the “incorrect” construction of the FAA’s savings clause that was relied upon, in part, by the Seventh and Ninth circuits. See Lewis v. Epic Sys. Corp., 823 F. 3d 1147 (7th Cir. 2016); Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016). The brief argued that the AT&T v. Concepcion, 563 U.S. 333 (2011) opinion illustrates that the rule adopted by the Seventh and Ninth circuits “disserves the FAA’s purposes, even though it would not preclude enforcement of all agreements to arbitrate employee claims . . . .”
The DOJ brief concluded, “Just as the savings clause was held not to encompass the state-law rule at issue in Concepcion, it does not encompass the analogous federal-law rule that the Seventh and Ninth Circuits derived from the NLRA.”
The DOJ amicus brief was just one of approximately 18 filed with the Supreme Court. (Not all currently appear on the Court docket.) But its about-face makes it one of the most interesting. The board has been authorized to and likely will represent itself before the Court. (See June 16, 2017, statement of the NLRB concerning Murphy Oil USA, Inc.) This development could mean a DOJ versus board attorney face-off during the one-hour argument allotted to the three consolidated cases.
BakerHostetler was counsel of record for seven amici curie supporting the positions of petitioners Epic Systems Corp. and Ernst & Young and of respondent Murphy Oil USA, Inc.
Bottom line: While the DOJ’s change of position in the consolidated cases is an unusual turn of events, it is not determinative in the consolidated cases.