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Murphy Oil Urges SCOTUS to Hear Overtime Class Action on Issue of Mandatory Arbitration

Normally, when a party involved in a lawsuit appeals the decision, it’s because that party lost their case in the lower courts and are hoping the higher court will be more favorable to their side of the argument. The winning party does not usually encourage the higher court to reopen their case case, but that’s exactly what Murphy Oil USA Inc. is doing after the Fifth Circuit Court ruled in its favor in a lawsuit against the National Labor Relations Board (NLRB).

The NLRB sued Murphy Oil, saying the mandatory arbitration agreements included in its employment contracts illegally denied workers their right to file a class action lawsuit against the oil company. The Fifth Circuit ruled in Murphy Oil’s favor, saying the Federal Arbitration Act gave businesses the right to settle disputes in arbitration, rather than in the courts.

The problem is the Federal Arbitration Act was designed to allow businesses to settle disputes with other businesses in arbitration, not for businesses to settle disputes with individuals. Furthermore, arbitration does not allow plaintiffs to combine their claims into class actions, which means many small claims never get the chance to be resolved through either arbitration or trial because they’re too small to justify the costs of bringing the suit.

Arbitration is also private, which means the results are never made public, leaving millions of workers in the dark about the suits brought against their own employer. This means that even if one employee is successful in bringing their claims to arbitration and receiving compensation for them, there could be many more people working at the company with identical claims who don’t get a chance to receive compensation because they were never made aware of the suit that was handled in arbitration.

The NLRB originally asked the U.S. Supreme Court to hear the case, which would give the NLRB one last chance to emerge from this legal battle victorious. Rather than simply taking its victory, Murphy Oil has joined its legal opponent in urging the Supreme Court to hear the case.

In its plea, the oil company pointed out that the circuit courts have not been able to agree on the question of whether including arbitration agreements in employment contracts is legal. While the Fifth, Second, and Eighth Circuit Courts have generally been ruling in favor of arbitration agreements, the Seventh and Ninth Circuit Courts have tended to side with the NLRB and other employee advocates.

Murphy Oil claimed that these contrasting rulings has led to uncertainty for both workers and employers all over the country. No matter which side the Supreme Court ends up favoring, Murphy Oil insists the highest court in the country needs to take a stand on the issue in order to resolve it once and for all.

Whether the Supreme Court will agree to hear the case or let the Fifth Circuit Court’s ruling stand is uncertain. As long as the high court remains short one judge, it has to be careful about the cases it chooses because a tie vote could lead to a standoff that could continue to leave the question in doubt and tie the hands of the Supreme Court until a new judge is finally appointed.

The Chicago class action and employment law attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Hoffman Estates and Schaumburg We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our Tinley Park and Skokie overtime and employment lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago and Oak Brook, and represents clients throughout the country who have unpaid overtime and other employment right claims.