The US Supreme Court ruled on May 21 in Epic Systems Corp. v. Lewis that class and collective action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA). The court sided with employers, rejecting arguments that class and collective action waivers were unenforceable because they violated the National Labor Relations Act (NLRA).

The employees argued that the FAA’s saving clause provided a basis for courts to refuse to enforce arbitration agreements that also include a waiver of the right to bring a class or collective action, because such waivers violate the NLRA. The employees also argued that the NLRA itself reflected a clearly expressed and manifest congressional intention to displace the FAA and bar class and collective action waivers, because the NLRA guarantees workers the right to engage in concerted activities for the purpose of collective bargaining or other mutual aid or protection. The Supreme Court rejected each of these arguments, finding that the NLRA does not contain a conflicting congressional command, and instead can be harmonized with the FAA to permit class and collective action waivers in employment arbitration agreements.

Join Morgan Lewis in May 2018 for these programs on a variety of topics in employee benefits and executive compensation, including investment related matters.

We’d also encourage you to attend the firm’s Global Public Company Academy series:

Visit the Morgan Lewis events page for more of our latest programs.

Join Morgan Lewis in April 2018 for these programs on a variety of topics in employee benefits and executive compensation.

We’d also encourage you to attend the firm’s Global Public Company Academy series:

And, don’t forget to visit our resource center on Navigating US Tax Reform, which lists our upcoming tax reform events, including:

Visit the Morgan Lewis events page for more of our latest programs.

Two recent decisions, CNH Industrial N.V. v. Reese, 138 S. Ct. 761 (2018), and Cooper v. Honeywell International, Inc., 2018 WL 1190385 (6th Cir. Mar. 8, 2018), continue the trend favoring employers in litigation challenging the termination of retiree medical benefits. 

In CNH, the collective bargaining agreement (CBA) provided healthcare benefits to employees who retired during its term. The CBA contained a general durational clause, which provided that all terms and conditions provided through the CBA would expire when the CBA expired. The CBA expired in 2004 and CNH sought to terminate retirees’ healthcare benefits. CNH retirees sued, claiming their benefits were vested. A district court granted judgment in the retirees’ favor and the US Court of Appeals for the Sixth Circuit affirmed. According to the Sixth Circuit, the durational clause was not dispositive and other language “tied” healthcare benefits to pension eligibility. These provisions rendered the CBA ambiguous, opening the door to extrinsic evidence, which the court concluded established vesting.

Join Morgan Lewis in March 2018 for these programs on a variety of topics in employee benefits and executive compensation.

Join Morgan Lewis in February 2018 for these programs addressing business developments that impact employee benefits and executive compensation.

Our outsourcing practice is hosting two upcoming webcasts:

Check Out Our Events!

November 07, 2017

Join Morgan Lewis in November for these programs on a variety of topics in employee benefits and executive compensation:

ABA’s 28th Annual Philadelphia Tax Conference – Employee Benefits: Employment Tax Update| November 1 | Philadelphia | Seminar presented by Mary B. (Handy) Hevener

Joint Committee on Employee Benefits (JBC)—American Bar Association (ABA) Fiduciary Institute 2017 – Special Considerations in Investments Involved with 401(k) Plans | November 6 | Washington, DC | Presentation by Marla J. Kreindler

2017 TEI Mergers & Acquisitions Seminar – Employee Benefits & Compensation| November 7 | Boston | Seminar presented by Patrick Rehfield

TEI Federal Chapter Meeting: Executive Compensation Update | November 9 | New York | Seminar presented by Mary B. (Handy) Hevener, Rosina Barker, Jeanie Cogill, Gina Lauriero, and Jonathan Zimmerman   

Tax Reform: The Devil’s in the Details, Part III of our Morgan Lewis Tax Reform Discussion | November 10 | Webinar presented by Mary B. (Handy) Hevener, Alexander L. Reid, and Jonathan Zimmerman | To learn more about this series, access Part I and Part II

2017 Tennessee Federal Tax Conference – The Incredible Shrinking De Minimis Fringe Benefit | November 17 | Franklin | Seminar presented by Patrick Rehfield

We’d also encourage you to attend the firm’s Public Company Academy series: Morgan Lewis Public Company Academy - Shareholder Activism Defense: What You Need to Know About Advance Notice and Other Bylaw Provisions | November 8

Visit the Morgan Lewis events page for more of our latest programs. 

On August 22, 2017, the District Court for the District of Columbia determined that recent Equal Employment Opportunity Commission (EEOC) regulations governing wellness program incentives are “arbitrary and capricious,” and remanded the regulations back to the EEOC for further consideration. The ruling is significant because the court determined that the EEOC regulations are too permissive. If the EEOC modifies the regulations, the new regulations will probably give employers less flexibility to provide wellness program incentives.

The EEOC may appeal the decision, and the regulations remain in effect for the time being. In fact, the court acknowledged that vacating the regulations would cause “potentially widespread disruption and confusion” because employers have already designed and implemented wellness incentives in reliance on the new regulations.