NEW ORLEANS — In a victory for Convergys Corp., the U.S. Court of Appeals for the 5th Circuit ruled to grant the company’s review following the National Labor Relations Board's (NLRB) decision that the company violated the National Labor Relations Act.
The board had previously ruled that requiring Convergys employees to sign a class-action lawsuit waiver and the enforcement of the waiver violated the National Labor Relations Act. Now the 5th Circuit will review the matter, and the court denied the NLRB's application for enforcement.
“The 5th Circuit has made clear that it will enforce class and collective action waivers in employment agreements,” Erin L. Kilgore, a partner with the Baton Rouge division of Kean Miller LLP, told the Louisiana Record. “Within days of the Convergys decision, the 5th Circuit reiterated its conclusion in LogistiCare Solutions, Inc. v. NLRB, No. 16-60029 (5th Cir. Aug. 9, 2017), where the court again held that the class and collective action waiver did not violate the National Labor Relations Act.”
Kilgore said that although the employees cannot pursue action collectively, they can file complaints individually.
“The ruling does not affect employees’ substantive rights," Kilgore said. "The court specifically emphasized its precedent that employees do not have a substantive right to participate in class or collective actions. Employees remain free to pursue their disputes with employers but would do so on an individual basis."
While the ruling protects an employee’s ability to sue on an individual basis, it also benefits employers, particularly smaller businesses that could experience significant distress due to a class-action tort matter. However, Kilgore heeds a warning for employers considering an addition of a class-action waiver.
“Employers must be mindful that there currently is a split among the circuits on the enforceability of class and collective action waivers, and the Supreme Court is set to consider this issue this term," Kilgore said. "Employers who require employees to sign class and collective action waivers should stay tuned for the Supreme Court’s decision this fall.”
The Supreme Court’s decision is sure to have far-reaching effects. Until the decision is given, employers should look to explore the option of the waiver, while employees should be mindful of their alternative legal routes in the event they seek litigation.