Tips to Help Avoid Class Action Litigation
Rudy Englund and Erin Wilson authored an article in the May/June 2014 issue of Washington Bankers Association’s (WBA) Issues and Answers magazine titled “Tips to Help Avoid Class Action Litigation.” In the article, Englund and Wilson discussed a number of helpful tips based on recent case law for financial institutions to decrease their risk of becoming involved in class or collective action litigation.
Class Action Waivers
In a significant victory for employers, the Fifth Circuit Court of Appeals recently affirmed its decision in D.R. Horton v. NLRB, where the court considered a prior decision by the National Labor Relations Board (the NLRB). That controversial NLRB decision had held that it was an unfair labor practice for the employer to require its employees to sign mandatory arbitration agreements in the context of their employment agreement, wherein the employees were required to waive their ability to pursue legal claims on a class or collective action basis. In a favorable ruling for employers, the Fifth Circuit’s decision rejected the NLRB’s holding. The court relied on the Supreme Court’s decision in AT&T Mobility LLC v. Concepcion, wherein the Supreme Court struck down a California rule banning class action waivers in consumer arbitration contracts. The Fifth Circuit’s decision in D.R. Horton affirmatively expanded the Concepcion court’s analysis to the employment agreement arena, and now courts are increasingly finding that employers are permitted to include class and collective action waivers in arbitration agreements with their employees. Without question, this is a tool that financial institution employers should consider using in efforts to avoid expensive class and collective action litigation.