The NLRB Issues Major Class Action Waiver/Mandatory Arbitration Ruling

Arbitration with salmon background

From Lexology, Truc Nguyen and Ronald Meisburg discuss a recent decision by the National Labor Relations Board (the “Board”) that supports employers ability to require arbitration agreements. Truc and Ronald write:

First, the Board held that the Act does not prohibit employers from promulgating class action waivers even where, as here, the promulgation was directly in response to Section 7 activity related to the filing of a class action wage lawsuit, and aimed at preventing employees from opting in to the class action. The Board reasoned that opting in to a collective action is merely a procedural step required to participate in a collective action, and thus an arbitration agreement that prohibits employees from opting in to a class or collective action does not restrict the exercise of Section 7 rights. Accordingly, the employer’s promulgation of the revised arbitration agreement did not violate the Act.

Second, the Board found that the Act does not prohibit employers from threatening to discipline or discharge an employee who refuses to sign a mandatory arbitration agreement. Noting that Epic Systems permits an employer to condition employment on employees entering into an arbitration agreement that contains a class- or collective-action waiver, the Board reasoned that that the employer’s statement amounted to an explanation of “lawful consequences of failing to sign an agreement and expression of a view that it would be preferable [to the employees] not to be removed from the schedule.”

Third, and significantly, the Board adopted the judge’s holding that employees cannot be disciplined or discharged for actually filing or participating in a class or collective action over wages, hours or other terms and conditions of employment. The Board quoted Memorandum GC 10-06 (June 10, 2010), in which then General Counsel Ronald Meisburg (now Special Counsel with Hunton Andrews Kurth) explained that employees “cannot be disciplined or discharged for exercising rights protected under Section 7 by attempting to pursue a class action claim. Rather, the employer’s recourse in such situations is to present to the court the individual waivers as a defense to the class action.”

Source: The NLRB Issues Major Class Action Waiver/Mandatory Arbitration Ruling – Lexology

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