unenforceable contract

In each of three consolidated cases, an employer and an employee entered into a written contract specifying that disputes arising from the employment relationship would be resolved through individualized arbitration proceedings rather than in court. The agreements in the Ernst & Young case, for example, allowed the employee to select the arbitration provider and permitted the arbitrator to grant any relief a court could grant, but required that claims pertaining to different employees be heard in separate proceedings. After their employment ended, the employees filed suit in federal district court. They asserted claims under the Fair Labor Standards Act for unpaid overtime and related state-law claims, and they sought to litigate those claims on behalf of a nationwide class or collective group of similarly situated employees. In the Ernst & Young matter, junior accountant Stephen Morris filed such a suit after leaving the firm. The employers responded by moving to compel arbitration under the terms of the contracts. District courts in some of the cases granted the motions and ordered the employees to proceed in individual arbitrations. In the Ernst & Young case the district court compelled arbitration, but the Ninth Circuit reversed that order. Parallel proceedings occurred in the Seventh and Fifth Circuits, producing conflicting results on whether the arbitration agreements could be enforced. In 2012 the National Labor Relations Board issued its first decision addressing agreements of this type, concluding that the National Labor Relations Act rendered unlawful any contractual requirement of individualized arbitration. Before that Board decision, courts and the Board's own general counsel had treated such agreements as enforceable. The three cases reached the Supreme Court after the Court granted certiorari in 2017 to resolve the disagreement among the circuits and between the Board and several courts of appeals.