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Arbitration Agreements
The NLRB has issued a series of decisions that restrict the ability of an employer to include a class action waiver in a workplace arbitration procedure. In D.R. Horton, the Board held that an employer violated Section 8(a)(1) by maintaining a mandatory arbitration agreement which required the arbitration of disputes, but waived an employee’s right to file class or collective actions in any forum.The Board reasoned that such a clause restricted the right of employees to engage in protected concerted activity that affects their working conditions.
Several months later, an NLRB ALJ struck down a class action waiver notwithstanding the fact that the employee could opt-out of the provision. The ALJ reasoned that although employees could opt out, “[t]he requirement that employees must affirmatively act to preserve rights already protected by Section 7 through the opt-out process is ... an unlawful burden on the right of employees to engage in collective litigation that may arise in the future.”
In addition to the foregoing, many other ALJs have struck down similar arbitration agreements in other cases. However, the Board’s D.R. Horton decision has been widely rejected by the federal courts, and it is likely that the U.S. Supreme Court will have the last word on the issue.
Several months later, an NLRB ALJ struck down a class action waiver notwithstanding the fact that the employee could opt-out of the provision. The ALJ reasoned that although employees could opt out, “[t]he requirement that employees must affirmatively act to preserve rights already protected by Section 7 through the opt-out process is ... an unlawful burden on the right of employees to engage in collective litigation that may arise in the future.”
In addition to the foregoing, many other ALJs have struck down similar arbitration agreements in other cases. However, the Board’s D.R. Horton decision has been widely rejected by the federal courts, and it is likely that the U.S. Supreme Court will have the last word on the issue.