NLRB to Weigh In On Arbitration Agreements Prohibiting Class Claims
Just two months after the Supreme Court's decision in AT&T Mobility v. Concepcion, in which the Court held that the use of class arbitration waivers in consumer contracts are permissible even when they conflict with state law, the National Labor Relations Board has invited interested parties to file briefs regarding whether an employer violates Section 8(a)(1) of the National Labor Relations Act by maintaining and enforcing an arbitration agreement with its employees that denies the arbitrator any authority to fashion the proceeding as a class or collective action. On June 16, 2011, the Board issued a Notice and Invitation to File Briefs on this issue in the case of D. R. Horton, Inc., Case No. 12-CA-25764.
Exactly one year earlier, on June 16, 2010, Ronald Meisburg, the NLRB's General Counsel at the time, issued a guideline memorandum for unfair labor practice charges involving employers' mandatory arbitration policies. In the memorandum, the General Counsel concluded that so long as the arbitration agreement does not require the arbitration of claims under the National Labor Relations Act:
[e]mployers...may require individual employees to sign a...waiver of their right to file a class or collective claim without per se violating the Act. So long as the wording of these agreements makes clear to employees that their right to act concertedly to challenge these agreements by pursuing class and collective claims will not be subject to discipline or retaliation by the employer, and that those rights— consistent with Section 7—are preserved, no violation of the Act will be found.
However, in the Board's recent Notice in the D. R. Horton case, the NLRB asks interested amici to file a brief addressing the following issue:
Did the Respondent violate Section 8(a)(1) of the Act by maintaining and enforcing its Mutual Arbitration Agreement, under which employees are required, as a condition of employment, to agree to submit all employment disputes to individual arbitration, waiving all rights to a judicial forum, where the arbitration agreement further provides that arbitrators will have no authority to consolidate claims or to fashion a proceeding as a class or collective action?
As such, it appears that the Board may not agree with the former General Counsel's analysis, and may find that arbitration agreements precluding class or collective action arbitrations violate Section 8(a)(1) of the Act.
The deadline for amici briefs is July 20, 2011. The parties may then file responsive briefs on or before August 3, 2011.
