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NLRB Holds Firm on its View that Class/Collective Action Waivers in Arbitration Agreements Violate the NLRA

Despite overwhelming judicial disapproval, the NLRB simply will not relent in its view that mandatory arbitration agreements containing class/collective action waivers violate the National Labor Relations Act.

In Chesapeake Energy Corporation, Case 14–CA–100530 (NLRB April 30, 2015), the NLRB once again stood behind its 2012 D.R. Horton and 2014 Murphy Oil decisions to hold that an employer violates the National Labor Relations Act when it requires an employee, as a condition of employment, to sign an arbitration agreement that precludes the employee from filing joint, class, or collective claims addressing wages, hours, or other working conditions.

The Board is saying that these class/collective waivers effectively prevent employees from exercising their NLRA Section 7 right to act in concert with respect to the terms and conditions of their employment.  Dozens of courts have rejecting its line of reasoning, but the Board has ignored them, perhaps waiting for a definitive decision by the Supreme Court on this issue.  Thus, while the Board’s decision doesn't necessarily settle this issue, employers wanting to take a more conservative approach could offer their employees the opportunity to opt out of an arbitration agreement.  Other, less risk adverse employers may continue to require that their employees sign these agreements while banking on the fact that courts will continue to enforce them, including, perhaps, the Supreme Court one day as well.

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