The Trump administration's U.S. Justice Department on Friday reversed its position in a major labor case, telling the U.S. Supreme Court that workplace arbitration agreements that ban class actions do not violate federal labor law.

The Justice Department's acting solicitor general, Jeffrey Wall, informed the court in an amicus brief that the government “reconsidered the issue and has reached the opposite conclusion” from the stance the Obama administration took on behalf of the National Labor Relations Board.

The government's petition in National Labor Relations Board v. Murphy Oil USA was originally filed by Deputy Solicitor General Edwin Kneedler last September. That brief, submitted before the election of President Donald Trump, said the NLRB had “reasonably concluded” that class action waivers unlawfully “deprive employees of their statutory right to engage in 'concerted activities' in pursuit of their 'mutual aid or protection.'”

The issue before the justices is whether the employee arbitration agreements, which include class action waivers, violate the National Labor Relations Act (NLRA) or are enforceable under the Federal Arbitration Act (FAA). In January, the high court granted review to the NLRB and two other petitions: Epic Systems v. Lewis and Ernst & Young v. Morris. Four other petitions are on hold pending the outcome in the granted cases. Neal Katyal of Hogan Lovells represents Murphy Oil and Epic, and Kannon Shanmugam of Williams & Connolly represents Ernst & Young.

In explaining the switched position, Wall wrote: “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.”

Scott Nelson of Public Citizen Litigation Group, which supported the NLRB petition for review, wasn't surprised by the Justice Department's switch.

“Now we have government schizophrenia,” Nelson said. “The NLRB has not changed its position and presumably unless they do, they will still be filing their own brief in support of their cert petition, just not represented by the solicitor general.”

While the switched position is not unusual, Nelson said, the weight of the solicitor general's arguments will be “minimal” because “what this reflects is a change in administrations as opposed to some respect in which the solicitor general is standing outside of politics and exercising neutral legal judgment.”

Nelson said he thinks the high court will not give the solicitor general's arguments any “additional force, given it has now argued both sides of the issue in the same case.”

The NLRB's membership has not changed and its position is not likely to change by the time the agency's brief is due in August, Nelson said. The agency's arguments are due some deference when it is interpreting the NLRA, he added. “But I'm beyond trying to predict the twists and turns in this case.”

There are 73 cases raising the legal question in the federal appeals courts, of which 18 have resulted in judgments and 32 have been held in abeyance pending the high court's decision, with the remaining in active status.

Companies in those cases include such familiar names as Countrywide Financial Corp., Samsung, GameStop Corp., Neiman Marcus and Hobby Lobby Stores.

Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

The Justice Department's acting solicitor general, Jeffrey Wall, informed the court in an amicus brief that the government “reconsidered the issue and has reached the opposite conclusion” from the stance the Obama administration took on behalf of the National Labor Relations Board.

The government's petition in National Labor Relations Board v. Murphy Oil USA was originally filed by Deputy Solicitor General Edwin Kneedler last September. That brief, submitted before the election of President Donald Trump, said the NLRB had “reasonably concluded” that class action waivers unlawfully “deprive employees of their statutory right to engage in 'concerted activities' in pursuit of their 'mutual aid or protection.'”

The issue before the justices is whether the employee arbitration agreements, which include class action waivers, violate the National Labor Relations Act (NLRA) or are enforceable under the Federal Arbitration Act (FAA). In January, the high court granted review to the NLRB and two other petitions: Epic Systems v. Lewis and Ernst & Young v. Morris. Four other petitions are on hold pending the outcome in the granted cases. Neal Katyal of Hogan Lovells represents Murphy Oil and Epic, and Kannon Shanmugam of Williams & Connolly represents Ernst & Young.

In explaining the switched position, Wall wrote: “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.”

Scott Nelson of Public Citizen Litigation Group, which supported the NLRB petition for review, wasn't surprised by the Justice Department's switch.

“Now we have government schizophrenia,” Nelson said. “The NLRB has not changed its position and presumably unless they do, they will still be filing their own brief in support of their cert petition, just not represented by the solicitor general.”

While the switched position is not unusual, Nelson said, the weight of the solicitor general's arguments will be “minimal” because “what this reflects is a change in administrations as opposed to some respect in which the solicitor general is standing outside of politics and exercising neutral legal judgment.”

Nelson said he thinks the high court will not give the solicitor general's arguments any “additional force, given it has now argued both sides of the issue in the same case.”

The NLRB's membership has not changed and its position is not likely to change by the time the agency's brief is due in August, Nelson said. The agency's arguments are due some deference when it is interpreting the NLRA, he added. “But I'm beyond trying to predict the twists and turns in this case.”

There are 73 cases raising the legal question in the federal appeals courts, of which 18 have resulted in judgments and 32 have been held in abeyance pending the high court's decision, with the remaining in active status.

Companies in those cases include such familiar names as Countrywide Financial Corp., Samsung, GameStop Corp., Neiman Marcus and Hobby Lobby Stores.

Copyright National Law Journal. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.