The Effect of National Labor Relations Board v. Murphy Oil USA

Major U.S. Supreme Court case over arbitration could affect employment classifications

Last fall, the U.S. Supreme Court heard oral arguments in a case that will have a reverberating effect on alternative dispute resolution in the employment context. In National Labor Relations Board v. Murphy Oil USA, the court will decide whether arbitration agreements that prohibit individual employees from pursuing claims on a class basis in any venue limit employees’ rights under the National Labor Relations Act to participate in “concerted activities” for their “mutual aid or protection.” Such a limitation would render these arbitration agreements an unfair labor practice.

The case is a consolidation of three separate disputes over arbitration clause enforceability involving Murphy Oil USA, Ernst & Young and Epic Systems Corp., a healthcare software company. While the case deals with arbitration clauses, the Supreme Court’s eventual ruling in NLRB v. Murphy Oil USA could have implications for another type of employment dispute receiving attention in several industries: Classification of workers as employees or independent contractors.

Laura Wolf, a plaintiff’s employment attorney at Rathod Mohamedbhai, said cases challenging worker classification tend to be brought in courts on a class basis because they will have the value of precedent. “The problem with the arbitration, either through Murphy Oil or not…is that if you’re going through arbitration, the decision you’re getting from this arbitrator is not precedential.”

Types of workers spotlighted recently in debates over classification have included exotic dancers, food-delivery drivers and ride-hailing drivers. The murky classification of ride-hailing drivers, over which different jurisdictions have split, came to light again when BuzzFeed News in February reported a growing trend of customers using services such as Uber or Lyft to get to hospitals and emergency rooms because they are cheaper and faster than ambulance rides. But the common status of the drivers as independent contractors means they may be held personally liable for failing to provide care to customers during rides.

To read this story and other complete articles featured in the April 9, 2017 print edition of Law Week Colorado, copies are available for purchase online.