NLRB Rejects Class Action Waivers and Postpones Workplace Posting Requirement
January 11, 2012
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The National Labor Relations Board (“NLRB”) has issued a Decision and Order holding that employers cannot force employees to sign arbitration agreements that include class and collective action waivers as a condition of employment (D.R. Horton, Inc., Case No. 12-CA-25764 (Jan. 3, 2012)). The case, which is the latest in many developments regarding class action waivers, signals that this area of law is far from settled.
The decision stands in stark contrast to last year’s U.S. Supreme Court decision in AT&T Mobility LLC v. Concepcion, which held that the Federal Arbitration Act (“FAA”) preempted a California rule that invalidated class action arbitration waivers in consumer contracts. (For more on the AT&T decision, see our May 11, 2011 Employment Law Alert.) Despite the high court’s position, the NLRB has now ruled that class action arbitration waivers violated employees’ substantive Section 7 rights under the National Labor Relations Act (“NLRA”) to engage in concerted activity for mutual aid or protection. Further, the NLRB held that its ruling did not conflict with the FAA, which generally makes employment-related arbitration agreements enforceable. In attempting to narrow its ruling, the NLRB stated that it was not banning all agreements to arbitrate nor was it requiring class arbitration; rather, it was holding only that employers must leave open a judicial forum for employees to pursue class or collective claims. We expect the decision to be appealed.
In other news, the NLRB has announced that it is, once again, postponing the effective date of its recent rule requiring employers to post a notice of employee rights under the NLRA. The new posting deadline is April 30, 2012.
The rule originally was slated to take effect on November 14, 2011, and then was pushed out to January 31, 2012, after a federal judge who is presiding over two lawsuits challenging the agency’s authority to require the workplace posting asked that the rule be delayed to give her time to fully consider the litigation. The NLRB says the latest postponement is to “facilitate the resolution of the legal challenges that have been filed with respect to the rule.”
We will monitor the status of the posting requirement and keep you up to date. In the meantime, for more information about the poster, see our September 9, 2011 Employment Law Alert.
Miller Law Group exclusively represents business in all aspects of California employment law, specializing in litigation, risk management, wage and hour class actions, ERISA litigation, and appellate law. If you have questions about your workplace obligations, please contact Michele Ballard Miller (mbm@millerlawgroup.com) or Carolyn Rashby (cr@millerlawgroup.com), or call (415) 464-4300.
This Alert is published by Miller Law Group to review recent developments in employment law. This material is designed to provide informative and current information as of the date of the Alert, and should not be considered legal advice.
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