Some of you may remember that back in 2015, we published an article entitled Arbitration of ERISA Claims – Yes You Can! A link to that article can be found here. In that article, we suggested that one key reason for adding ERISA claims to your arbitration agreement was to avoid class actions through the inclusion of a class action waiver in the arbitration agreement. Particularly on the pension side, ERISA class actions can involve millions of dollars of exposure and litigation costs.
Last week, the Supreme Court confronted head on whether the inclusion of a class action waiver in an arbitration agreement violated the National Labor Relations Act. Ultimately, the Court concluded that class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act. (See our article here for an in-depth discussion of the Supreme Court’s decision).
Based on this decision, employers can be even more confident that class or collective action waivers in arbitration agreements are permissible. Be on the lookout, however, for our post on the upcoming decision from the Ninth Circuit in the ERISA class action against USC, Munro v. University of Southern California. The Ninth Circuit heard argument on May 15 on whether a class action waiver in an arbitration agreement is enforceable to prevent a class claim brought on behalf of the plan under Section 502(a)(2) of ERISA.