An employer may lawfully issue to its employees a new or revised mandatory arbitration agreement containing a class- and collective-action waiver specifying that employment disputes are to be resolved by individualized arbitration, even if it was in response to employees opting into a collective action (such as a wage lawsuit), the National Labor Relations Board (NLRB) has ruled. Cordúa Restaurants, Inc., 368 NLRB No. 43 (Aug. 14, 2019). The NLRB also concluded that the NLRA does not prohibit an employer from threatening to discharge an employee who refuses to sign such an agreement.
Articles Discussing Labor Arbitration.
In a controversial decision that rejects the precedent of numerous federal and state courts, the National Labor Relations Board (NLRB) has reaffirmed its earlier decision in D.R. Horton, Inc., 357 NLRB No. 184 (2012). In D.R. Horton, the NLRB ruled that an arbitration agreement under which employees were required to waive the right to bring class or collective actions violated the National Labor Relations Act (NLRA). In the recent decision, a 3-2 NLRB majority invalidated a similar agreement, concluding that the “reasoning and result” of the Horton decision were correct. Murphy Oil USA, Inc., 361 NLRB No. 72 (2014). Two dissenting NLRB members disagreed with the decision, one observing that the majority had chosen to “double down on a mistake that, by now, is blatantly obvious.”
This month represents the first anniversary of the controversial decision by the National Labor Relations Board (NLRB) in D.R. Horton, Inc. In D.R. Horton, the NLRB ruled that D.R. Horton, a nationwide homebuilder, violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by requiring employees to sign agreements that: 1) contained a mandatory arbitration provision; and 2) required them to bring all employment-related claims to an arbitrator on an individual basis, as opposed to as a potential class action.