NLRB Strikes Down Arbitral Class Action Waiver

Prohibited.pngIn D.R. Horton, Inc., (pdf) the National Labor Relations Board, by a 2-0 vote, found that an arbitration agreement requiring "as a condition of employment" all employees to agree to waive the right to bring class or collective actions in any forum violated Section 8(a)(1) of the National Labor Relations Act (NLRA), which guarantees the rights of employees to engage in concerted, protected activity. The decision was issued by Board Chairman Mark Pearce and Member Craig Becker on January 3, 2012, the final day of Member Becker's controversial recess appointment. Republican Board Member Brian Hayes was recused and did not participate in deciding the merits of the case. The decision has potentially wide-ranging implications for employers who have required employees to agree to arbitrate their disputes and at the same time waive the right to pursue their claims on a class or collective basis. The decision, however, also leaves open the possibility that agreements that are not "imposed" on employees may yet be enforceable, even if those agreements ban class or collective actions in any forum. Continue reading about this development here.

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.