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Murphy Oil: US Supreme Court Takes Up Workers’ Rights and Employment Law

Filed under Employment Law

Among the more momentous decisions facing the US Supreme Court this year is the question of whether workers can be required — as a condition of taking a job — to arbitrate any workplace dispute and can also be barred from filing a class action lawsuit. This is the question raised by three cases that have been consolidated into one appeal: National Labor Relations Board v. Murphy Oil USA, Inc., Epic System v. Lewis, Ernst & Young v. Morris, Supreme Court Case No. 16-307 (hereinafter “Murphy Oil”).Here are is what Las Vegas workers should know about employment law.

Las Vegas, Nevada Employment Law: What is a Class Action Lawsuit?

On the question of banning class action lawsuits, there is currently a strong conflict between the federal courts and the National Labor Relations Board (“NLRB”). In 2012, the NLRB issued a decision banning class action waivers in arbitration provisions. The NLRB — a federal agency tasked with protecting workers and protecting unionization efforts — asserted that such waivers were a violation of National Labor Relations Act. The NLRB held that banning class action lawsuits interfered with workers’ rights to engage in “concerted activities” for “mutual aid or protection.” Under federal labor laws, employers are not allowed to “interfere with, restrain, or coerce employees” when they are engaged in such concerted activities.

Now, some might be asking: What is a class action lawsuit? In brief, a class action lawsuit is one lawsuit filed by a whole group of similarly-situated people, such as all the employees of a certain restaurant. The number of class “members” could be 20 or 20,000 or 200,000,000. They file one lawsuit instead of 20 or 20,000 or 200,000,000 lawsuits. The key is that each person — each plaintiff — must have almost exactly the same facts that entitle him or her to an award of damages. So, let’s say a restaurant has been underpaying all of its employees by refusing to pay overtime. Even though the employees might be waiters, bartenders, and cook staff, they all have the same legal problem: not being paid their overtime wages.

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Under those circumstances, the employees can hire a talented and courtroom-tested Las Vegas employment lawyer and file a class-action lawsuit and sue the restaurant in one lawsuit, rather than in 100 separate lawsuits. The famous case of Erin Brockovich was a class action lawsuit. Equifax is facing a class action lawsuit because of the huge data breach that occurred earlier this year.

Many employers have been banning class action lawsuits in their employment contracts.

Las Vegas, Nevada Employment Law: Conflict Between NLRB and Federal Courts

The NLRB’s decision to ban class action waivers has, however, brought the NLRB into conflict with many federal courts. During the first four years after the NLRB banned class action waivers, the Second, Fifth, and Eighth Circuit federal courts of appeal refused to enforce the NLRB’s ban. Here in Nevada, the Nevada Supreme Court also refused to agree with the NLRB’s decision. In Tallman v. Eighth Judicial District Court, 359 P. 3d 113 (Nev. Sup. Court 2015), the court held that workers could be compelled to arbitrate and that they could be compelled to waive their rights to file class-action lawsuits.

Since 2016, however, three other circuit courts of appeal have sided with the NLRB — the Sixth, Seventh, and the Ninth Circuits. In fact, the Ninth Circuit case — Morris v. Ernst & Young, 834 F. 3d 975 (9th Cir. 2016) — is directly in conflict with the Nevada Tallman case just discussed and is one of the cases now before the Supreme Court.

The reason for the legal conflict is another statute called the Federal Arbitration Act (“FAA”). The FAA states the federal government’s strong support for the idea of arbitration. Arbitration is mechanism for resolving disputes that is out-of-court. Instead of a judge and jury, the parties have a panel of “arbitrators.” Instead of public proceedings overseen by elected/appointed judges, the arbitration process is conducted in secret by private organizations which are accountable to no one but themselves. With normal civil litigation, there is an appeal process, but arbitration is meant to be final, so essentially there is no appeal. Arbitration can be forced on workers for almost every possible claim including:

  • Sexual harassment;
  • Discrimination;
  • Wrongful termination;
  • Wage and hour claims;
  • Retaliation; and
  • Claims by whistleblowers.

In practice, arbitration is pro-employer and pro-corporation. Thus, it is not surprising that so many businesses are attempting to require their workers and customers to agree to arbitration and waive their rights to file class-action lawsuits.

Las Vegas, Nevada Employment Law: Current Supreme Court Legal Principles

If the Murphy Oil case did not involve the NLRB and workers, the case would be easy to predict. In recent years, by close 5-4 margins, the US Supreme Court has supported the idea of arbitration and has upheld class action waivers. But, because this case involves collective action by workers, a different result might occur.

Oral argument on the case was heard in October. According to reports, four of the nine justices — Justices Breyer, Kagan, Sotomayor, and Ginsburg — asked questions and made statements that might be interpreted as supportive of the NLRB position. The Chief Justice and Justice Alito seemed to support the employers, and Justices Gorsuch and Thomas were silent. Justice Kennedy made comments that might be interpreted either way. For example, he questioned whether workers could still engage in joint concerted activity by hiring the same lawyer and having that one lawyer file multiple lawsuits at the same time.

At this point, all parties are waiting to see how the Supreme Court will rule.

Employment Law in Las Vegas: Contact Paul Padda Law Today

If you need more information about your rights as a worker in Nevada, contact Paul Padda Law today. Before he founded Paul Padda Law, Mr. Padda was a federal prosecutor.  He knows how to deliver results for numerous clients in Las Vegas and across Nevada. Employment law claims are legally complex and often factually complicated. Do not take chances with legal counsel that may not really understand the nuances of Nevada and federal employment law. The attorneys at Paul Padda Law can help you navigate through the state and federal laws created to protect workers in Nevada and across the country. Choose Paul Padda Law. Call (702) 366-1888 today to schedule your initial consultation. Hablamos español.


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Paul Padda, a former federal prosecutor, is the founder of Paul Padda Law: a law firm based in Las Vegas Nevada representing plaintiffs throughout the nation in personal injury and other civil cases. With over 15 years experience litigating in federal and state court, Paul has a proven track record of success, including obtaining one of the largest jury verdicts in Nevada history. A first generation American, Paul is dedicated and committed to helping his clients navigate the legal system and take on large and powerful interests. A lawyer who truly cares, Paul provides individualized and compassionate attention to each and every one of his clients.

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