Back in May, we hailed the Supreme Court’s decision in AT&T Mobility v. Concepcion as a potentially huge step forward for employers that seek to require individual arbitration of employment claims. Last week, however, the NLRB again proved to be the wet blanket at the party. In D.R. Horton, the Board addressed an employer agreement that required all employees to waive their right to a judicial forum and to agree to bring all claims to an arbitrator on an individual basis. The agreement prohibited the arbitrator from consolidating claims, fashioning a class or collective action, or awarding relief to a group or class of employees. The Board held that such an agreement violated the National Labor Relations Act because it unlawfully barred employees from engaging in “concerted activity” which includes the right to file a class or collective action regarding wages, hours, or working conditions, whether in court or before an arbitrator because such an action seeks to initiate or induce group action protected by [the NLRA]." The Board emphasized that requiring employees to individually arbitrate their grievances is lawful so long as the requirement does not foreclose collective action judicially.
Everyone expects that this decision will be appealed. Not only is the decision in apparent conflict with the AT&T Mobility decision, but the decision was also rendered by only two Board members potentially in violation of the Supreme Court’s decision in New Process Steel v. NLRB. Also, it is interesting to note that the EEOC submitted an amicus brief urging the NLRB to decide in the manner that it did. As a result, we can expect continued hostility from that agency as well in response to collective arbitration requirements.