By: Anne D. Harris, Esq.
Despite heavy criticism and the Court of Appeals for the Fifth Circuit’s recent invalidation of the National Labor Relations Board’s (“NLRB”) D.R. Horton decision, the NLRB has not revised its position on class action waivers in employment arbitration agreements. Perhaps not surprisingly, the Board has not only ignored the criticism but instead continues to stretch the boundaries of its reach. In Leslie’s Poolmart, Inc., a recent decision by an NLRB Administrative Law Judge (“ALJ”), demonstrates that tendency. There, the ALJ expanded the Board’s D.R. Horton holding to include arbitration agreements that are silent on the issue of class and collective claims.
In Leslie’s Poolmart, new employees were required to sign an arbitration agreement providing that they agreed to arbitrate and employment-related issues. However, the agreement did not indicate whether an employee could pursue such claims on behalf of a class. The issue arose when an employee filed a federal class action suit against the company for an alleged failure to pay overtime wages. In response, the company filed a motion to compel arbitration for the individual claimant and to dismiss the class action suit. The employee filed an unfair practice charge against the company as a result of its actions.
The ALJ first rejected the company’s argument that D.R. Horton no longer was good law after the Fifth Circuit’s decision. Rather, the ALJ asserted that, absent a Supreme Court ruling, she was still bound by the Board’s D.R. Horton precedent. The ALJ also concluded that, although the employee filed a class action complaint without active participation by any other employee, that employee was nevertheless engaged in protected Section 7 activity because he sought to enlist the involvement of other employees for “mutual aid and protection.” Further the ALJ concluded that although the arbitration agreement did not specifically address class/collective action claims, the motion to compel arbitration violation Section 8(a)(1) of the Act because, following D.R. Horton, it interfered with the rights of employees to initiate classwide litigation.
What This Means For Employers
This decision underscores the Board’s adamant refusal to revise its position on class action waivers in employment arbitration agreements despite disagreement in many federal jurisdictions. Absent a repudiation by the Supreme Court, the Board is unlikely to reverse its position in D.R. Horton, and future decisions may expand it even further.