Employment arbitration provisions are a continually evolving area of the law, with recent cases helping to define new parameters.  There are the class action implications of AT&T Mobility v. Concepcion and now NLRB issues raised by an Administrative Law Judge’s decision in Supply Technologies, L.L.C., 2011 NLRB LEXIS 273 (May 31).  In Supply Technologies, the employer instituted an alternative dispute resolution program with a final arbitration step.  The company’s “Total Solution Management (TSM)” contained three documents: Official Rules, Agreement to Use, and Questions and Answers.  The employer terminated approximately twenty employees who failed to sign the TSM.  The Administrative Law Judge found the discharges unlawful because the TSM policy itself was unlawful.  Although the employer argued that the policy stated employees were free to “file a charge or complaint with a government agency,” the ALJ found the additional language requiring an employee who files a charge with an administrative agency to waive his or her right to remedial relief rendered that right meaningless and had a chilling effect on employees’ willingness to exercise the right.  Moreover, the ALJ found the three documents comprising the TSM were entirely inconsistent in whether this right existed at all; the ALJ pointed to other provisions of the program that stated “the only claims” employees could bring outside of the TSM were in regards to criminal claims and claims for workers’ compensation or unemployment benefits and that all other claims “must be brought under the TSM program.”  And, the ALJ noted, the program had no express exception for filing a claim with a government agency, such as the Board, in these additional provisions.  The ALJ therefore found the policies as a whole “rather ambiguous” and “rife with contradictions and inconsistencies regarding” the rights of employees.  As employers take a new look at their arbitration provisions for compliance with other employment areas, such as class action waivers, it may be a good time to ensure the policies pass scrutiny on NLRB issues as well.

This entry was written by Denise Barton Ward.