Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.
In D.R. Horton, Inc., the National Labor Relations Board (“Board”) last week ruled that arbitration agreements imposed as a condition of employment prohibiting employees from filing class action claims violate the National Labor Relations Act (“NLRA”). It found that filing a class or collective action claim is protected activity under Section 7 of the NLRA, which says employees have the right to engage in concerted activities for “mutual aid and protection,” and that an arbitration agreement employees are required to sign as a condition of employment that waives an employee’s right to bring a class action in both arbitration and court violates the employee’s Section 7 rights.
For health care employers that were looking to last year’s Supreme Court ruling in AT&T Mobility v. Concepcion as unchallenged support for mandatory employment arbitration agreements with class action waivers, this NLRB ruling is a step the other way. It remains to be seen how this will play out. Hospital employers may yet find that arbitration agreements required as a condition of employment are a pathway to avoiding exposure in misclassification and off-the-clock overtime cases, and other potential class action claims in heavily-populated job titles that include individuals covered as “employees” under the NLRA, but likely will have to wait to see if the Federal Arbitration Act trumps the NLRA or vice–versa.
In the meantime, this will be a year in which effectiveness and status of workplace arbitration agreements, particularly as to class issues, will be in flux. For more information, see Littler’s ASAP on this recent case.