NLRB adds another wrinkle to arbitration agreement law — Business Management Daily: Free Reports on Human Resources, Employment Law, Office Management, Office Communication, Office Technology and Small Business Tax Business Management Daily

NLRB adds another wrinkle to arbitration agreement law

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in Employment Law,Human Resources

by Abigail Crouse, Esq.

In January, the National Labor Relations Board (NLRB) held that employers may not require employees to sign arbitration agreements that waive their rights to bring class or collective actions.

In a 2-0 decision, the board ex­­amined a “Mutual Arbitration Agree­­ment” (MAA) that home builder D.R. Horton Inc., required employees to sign as a condition of employment. The agreement mandated resolution of all employment disputes through arbitration and prohibited the arbitrator from hearing any consolidated, class or collective claims.

As a result, employees who signed the MAA were prohibited from bringing any class or collective actions, either in court and before an arbitrator. (D.R. Horton, Inc., Case 12-CA-25764, Jan. 3, 2012)

The NLRB reasoned that such an agreement infringes on employees’ rights to engage in “concerted activities” under Section 7 of the National Labor Relations Act (NLRA). 

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