This case, which the Massachusetts Supreme Judicial Court (SJC) paired for hearing with the Court’s reconsideration of its 2009 decision in Feeney v. Dell (in which NELF filed an amicus brief in support of Dell, see above), raises the same essential issue—the enforceability of a class arbitration waiver—but in the context of employment.
The dispute arises out of the plaintiff’s franchise agreement with System4 and NECCS, Inc. (collectively “System4”) to provide commercial janitorial services. The agreement included a mandatory pre-dispute arbitration clause that restricted arbitration only to individual claims (a class-arbitration waiver). In 2010 the plaintiff filed a putative class action in the Massachusetts Superior Court primarily alleging that System4 misclassified him and similarly situated individuals as independent contractors in violation of the Massachusetts Wage Act, G.L. c. 149, § 148B. System4 moved to stay the litigation so that arbitration could proceed, but the Superior Court denied the motion on the ground that the class-action waiver in the arbitration provision was contrary to public policy under Feeney v. Dell. The Superior Court subsequently denied reconsideration of this decision in light of the Supreme Court’s holding on the enforceability of class arbitration waivers inAT&T Mobility, LLC v. Concepcion. The SJC took the matter and solicited amicus briefs in this case, as in Feeney, on whether the public policy exception announced in Feeney survives Concepcion.
NELF filed an amicus brief in this case, again as in Feeney, arguing that the SJC’s invalidation of class arbitration waivers in the 2009 decision has been invalidated by Concepcion, which held that, under the Federal Arbitration Act (FAA), class arbitration waivers contained in valid arbitration agreements are uniformly enforceable.
In this connection, NELF’s brief addressed the view recently expressed by the NLRB in its D.R. Horton decision that the National Labor Relations Act trumps the FAA. To the contrary, NELF argued that the command of Concepcion is not limited to state law claims, but applies equally to class waivers in the arbitration of federal statutory claims, absent a “contrary congressional command” on the face of another federal statute that bars or limits the application of the FAA to disputes arising under that statute. CompuCredit Corp. v. Greenwood, 132 S. Ct. 665, 669 (2012). The NLRA’s general language protecting employees’ rights to engage in “concerted activity . . . for mutual aid and protection” falls far short, and is entirely unrelated to, the CompuCreditstandard, which would have to expressly create a nonwaivable right to class actions to limit the FAA’s mandate under Concepcion.
In a decision issued before the Supreme Court Amex case, discussed above, the SJC enforced the class waiver. The SJC held that, although it interpreted Concepcion as permitting a case-specific challenge to class waivers, the plaintiffs in this case had failed to carry their burden of proof under such a challenge. Subsequently, the Supreme Court decided Amex, the SJC requested briefing to reconsider its decision, and the SJC then affirmed its decision enforcing the waiver, but on the ground that the FAA compels such a result.