Mass-Peculiarities: An Employers Guide to Wage & Hour Law in the Bay State 2022 Edition

© 2022 Seyfarth Shaw LLP Massachusetts Wage & Hour Peculiarities, 2022 ed. | 177 Concepcion , the U.S. Supreme Court ruled that states cannot force companies with arbitration provisions to allow class arbitrations. 1070 After Stolt-Nielsen and Concepcion , plaintiffs continued to argue that class action waivers in arbitration agreements were not enforceable as a matter of public policy in situations where the small value of a single plaintiff’s claims rendered it impossible to effectively vindicate his or her rights in the absence of class proceedings. In June 2013, the SJC held that a class action waiver was unenforceable for this reason, essentially adopting the “effective vindication” doctrine. 1071 Only days later, in American Express Co. v. Italian Colors Restaurant , the U.S. Supreme Court rejected this argument. 1072 Shortly thereafter, the SJC recognized in a pair of rescript decisions that in light of American Express , the “effective vindication” doctrine is no longer a proper basis to invalidate class action waivers in arbitration agreements, including for wage and hour claims. 1073 The National Labor Relations Board (NLRB) had further complicated the issue of class action arbitration waivers by ruling that class action waivers violate Section 7 of the National Labor Relations Act, which provides employees the right “to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection . . . .” 1074 In D.R. Horton, Inc ., the NLRB pursued unfair labor practice charges against an employer based on the use of pre- dispute mandatory arbitration agreements containing class action waiver clauses. 1075 Ultimately, the U.S. Supreme Court rejected this position in Epic Systems v. Lewis , explaining that Section 7 focuses on employees’ right to organize unions and to bargain collectively and does not confer a right to class or collective actions. 1076 Most recently, the Supreme Court in Lamps Plus, Inc. v. Varela held that a court may not compel class or collective arbitration even if the agreement is ambiguous on that point. 1077 The Court explained that ambiguity is an insufficient basis to infer consent to participate in class-wide arbitration. In light of these decisions, many employers have considered adopting arbitration agreements with class action waivers. However, whether or not to do so remains a complex issue, 1070 Id. at 351-52 (holding state laws preempted by federal law where they invalidate arbit rat ion class act ion waivers because the claims are likely to involve smaller dollar amount s, which would not likely be prosecuted on an individual basis). 1071 Feeney v. Dell, Inc. , 465 Mass. 470, 472 (2013) (holding that class act ion waiver was unenforceable where plaint iff’s claim was of lit t le monetary value and therefore individual arbit rat ion was not realist ic opt ion under terms of arbit rat ion agreement ). 1072 Am. Express Co. v. Italian Colors Rest. , 570 U.S. 228, 133 S. Ct . 2304, 2311-12 (2013) (holding that class waivers in arbit rat ion agreement s cannot be invalidated on the grounds that the inability to arbit rate on a classwide basis precludes “effect ive vindicat ion” of plaint iffs’ right s). 1073 Feeney v. Dell, Inc. , 466 Mass. 1001, 1002-03 (2013); Machado v. System4 LLC , 466 Mass. 1004 (2013). 1074 29 U.S.C. § 157. 1075 See D.R. Horton, Inc. , 357 NLRB No. 184, 2012 WL 36274, at *2 (N.L.R.B. Jan. 3, 2012). The NLRB also did so in Murphy Oil USA, Inc. , 361 NLRB No. 72, 2014 WL 5465454, at *29 (N.L.R.B. Oct . 28, 2014). 1076 Epic Sys. Corp. v. Lewis , 138 S.Ct . 1612, 1624 (2018). 1077 Lamps Plus, Inc. v. Varela , 139 S.Ct . 1407 (2019).