Can Employers Require Workers to Sign Away Their Right to Come Together to File Class Claims Over Working Conditions? NLRB Says No.
In D.R. Horton, Inc. and Michael Cuda, 357 NLRB No. 184 (2012), the National Labor Relations Board (“Board”) decided that an employer violated the National Labor Relations Act (“the Act”) when it required its employees to sign an arbitration agreement that waived their right to file joint, class, or collective claims, over wages, hours or other working conditions.
In the Board’s opinion, there is no question that when more than one employee (or named plaintiffs) initiate a joint, class, or collective action, their activity is concerted activity, which is protected by the Act: “Clearly, an individual who files a class or collective action regarding wages, hours or working conditions, whether in court or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct protected by Section 7 [of the National Labor Relations Act].”
In fact, the Board said these forms of collective efforts to redress workplace wrongs or improve workplace conditions are at the core of what the Act protects. The Board’s decision says workers should be able to come together to bring class claims whether it’s in court or in arbitration.
The Board also cautioned employers by reasserting the idea that going to arbitration can take the place of going to court only so long as the person bringing the claim to arbitration can fully achieve everything she would have been able to achieve in court.
The Board made its decision in D.R. Horton regardless of the recent United States Supreme Court case, AT&T Mobility v. Concepcion, 131 S.Ct. 1740 (2011), which held that certain binding arbitration clauses (agreements to arbitrate waiving the signers ability to go to court) in consumer contracts were valid. This is notable because it indicates it is the opinion of the current Board that the rules set out in Concepcion apply only to contracts in retail settings, and not to employment settings.