By Olivia Hoffman and Katie Rosoff

The Supreme Court first approved the use of mandatory arbitration provisions in employment contracts in 1991 in Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 31 (1991), which held that a securities broker could be compelled to arbitrate a federal age discrimination claim against his employer under the Federal Arbitration Act (“FAA”).  In the years since, arbitration agreements have proliferated in employment and consumer contracts, and legal challenges to the validity of these agreements have been largely unsuccessful.  While the general policy in favor of arbitration remains strong, it comes into potential conflict with the National Labor Relations Act (“NLRA”) in the case of Epic Systems Corp. v. Lewis, which the Supreme Court will decide this term. 

The case presents the question of whether mandatory individual (i.e., non-class) arbitration agreements in employment contracts violate the NLRA, which protects the right of workers to bargain collectively.  Three circuit courts have weighed in, with the Seventh and Ninth Circuits holding in Lewis v. Epic Systems Corporation, 823 F.3d 1147 (7th Cir. 2015) and Morris v. Ernst & Young, LLP, 834 F.3d 975 (9th Cir. 2016), respectively, that a ban on litigating or arbitrating on a class basis violates the NLRA’s collective bargaining guarantee, and the Fifth Circuit coming to the opposite conclusion in Murphy Oil USA, Inc.  v. NLRB, 808 F.3d 1013 (5th Cir. 2015).  Each of these cases arose when employees filed class action lawsuits against their employers based on labor law violations and the employers moved to compel arbitration. 

In an article published in FinTech Weekly, Jenner & Block Partners Gayle E. Littleton, David Bitkower and Justin C. Steffen discuss the recent rise of virtual currencies and warn individuals and companies that, although the growth of cryptocurrencies can give the appearance of a Wild West for the digital age, those active in the area should pay close attention to the technologies and the enforcement risks involved.  The authors note that regulators’ interest has intensified.  A number of US Government agencies, including the Securities and Exchange Commission, Commodity Futures Trading Commission and Internal Revenue Service, have issued guidance on the application of laws and regulations to virtual currencies, and numerous agencies have taken enforcement actions to protect consumers.  In the article, the authors outline some simple, straightforward practices that business can adopt in order to stay on the right side of regulators.

To read the full article, please click here.

By Alexander M. Smith

Last October, the Consumer Financial Protection Bureau issued a final rule requiring payday lenders, automotive title lenders, deposit advance lenders, and similar short-term loan issuers to determine up front whether borrowers would have the ability to repay certain short-term, small dollar loans without borrowing again.  (The CFPB press release summarizing this rule is available here.)  On January 16, however, the CFPB announced that it would initiate additional rulemaking so that it could “reconsider” this rule.   Although the CFPB’s announcement did not repeal the rule, Law360 notes that many observers believe that the protections in the CFPB’s final rule will be “rolled back or eliminated altogether” and that other federal regulators, such as the Comptroller of the Currency, are considering amending their rules to expand the availability of similar small-dollar loans.   We will continue to monitor and report on the fate of the CFPB’s payday lending rule.

2017 was another busy year for the Consumer Law Round-Up. Launched by the firm’s Consumer Law Practice, the blog updates readers on key developments within consumer law and provides insights that are relevant to companies and individuals that may be affected by the ever-increasing patchwork of federal and state consumer protection statutes. In 2017, the Consumer Law Round-Up featured posts by approximately 30 different authors on a wide array of topics. 

Below is a list of the Top 10 most popular posts of 2017. 

#1 Johnson & Johnson Deactivates Aveeno Active Naturals Lawsuit with $6.75 Million Settlement

On May 26, the plaintiffs in Goldemberg v. Johnson & Johnson Consumer Cos. Inc. filed a motion for preliminary approval to settle their class claims against Johnson & Johnson related to the defendant’s Aveeno Active Naturals brand of personal care products. The lawsuit alleged that the Aveeno products were falsely advertised...Read more

#2 They’re Heeeere! Get Ready for the Specter of Mandatory Initial Discovery in All Cases, Even Consumer Class Actions and Other Complex Cases

The Mandatory Initial Discovery Pilot Project has started in the District of Arizona (for cases filed after May 1, 2017) and the Eastern Division of the Northern District of Illinois (for cases filed on or after June 1, 2017). See General Order 17-08 (D. Az. Apr. 14, 2017); General Order 17-005 (N.D. Ill. Apr. 27, 2017). The bottom line is that the pilot project will require defendants in these courts to quickly marshal the relevant facts and in short order produce a level of substantive disclosures, documents, and ESI that could pose a considerable challenge in consumer class actions...Read more

#3 The CFPB’s Recent Arbitration Agreements Rule Likely to Face Numerous Challenges Ahead

On July 10, the Consumer Financial Protection Bureau (CFPB) issued a final rule under Section 1028(b) of the Dodd-Frank Act that governs the use of arbitration by providers of a wide swath of consumer financial products and services. Once in effect, the rule will preclude providers of these financial products and services from including class action waivers in their pre-dispute agreements. But the rule’s future in the face of potential legal challenges and in Congress is far from certain...Read more