Ignoring Federal Appellate Courts, the NLRB Still Rules that Arbitration Agreements that Ban Class-Wide Actions Are Illegal

Since August 14, 2013, NLRB administrative law judges have issued findings that three employers violated the National Labor Relations Act by requiring employees to execute an arbitration agreement that contained a ban on a collective or class-wide action.  In all three cases, the NLRB administrative law judges based their decisions on the NLRB’s holding in D.R. Horton, Inc., 357 N.L.R.B. No. 184, 192 LRRM 1137 (2012) (5 DLR AA-1, 1/9/12).  In that matter, the NLRB found that an employer committed an unfair labor by maintaining a mandatory arbitration agreement that waived the rights of employees to participate in class or collective actions.  The NLRB reasoned that the employer interfered with their employees Section 7 rights by banning the collective pursuit of workplace grievances through litigation or arbitration.  While most courts have rejected the NLRB’s reasoning in D.R. Horton and continue to enforce arbitration agreements banning class-wide or collective actions, NLRB administrative law judges have made it clear that they will continue to find these type of provisions illegal until the NLRB or the U.S. Supreme Court reverses D.R. Horton.

McMahon Berger routinely advises clients on the factors to be considered when considering an arbitration agreement, including the most recent court and NLRB decisions. If interested in an arbitration agreement for your employees, contact our St. Louis Employment Law Firm at 314-567-7350

Authored by Brian C. Hey

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