I first wrote about the NLRB’s decision that pre-dispute arbitration agreements waiving the right to assert claims as part of a class action violated federal labor law in January 2012 (post). Back then, I thought it was prudent for employers to wait for the result of the the inevitable appeal that would follow before revising or throwing out their arbitration agreements containing class action waivers.
The Fifth Circuit Court of Appeals held recently that D.R. Horton’s pre-dispute arbitration agreement requiring the builder and its employees to arbitrate disputes on an individual, non-class action basis did not violate the NLRA. The Court affirmed, however, the Board decision to the extent it required D.R. Horton to clarify to its employees that the arbitration agreements did not waive their right to file unfair labor practice charges with the National Labor Relations Board.
The takeaway from the Court’s decision is that arbitration agreements with class action waivers are enforceable under the Federal Arbitration Act and employers may still consider these kinds of agreements as part of their alternative dispute resolution programs. However, employers should clarify in those agreement that they do not eliminate the employee’s right to file or pursue unfair labor practice charges with the National Labor Relations Board.
You can access a complete copy of the opinion here.
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