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Arbitration Update by Bill Harding

 

 
On October 28, the three Democrat members of the NLRB reaffirmed a controversial 2012 ruling of the NLRB which was denied enforcement by the United States Court of Appeals for the Fifth Circuit.  In the 2012 decision, the NLRB only had three members and one of the three did not participate in the decision.  The other two found that an employer violates the NLRA by enforcing an arbitration policy which prohibits employees from participation in class actions.  On October 28, the 2012 ruling was affirmed but the two Republican members of the NLRB filed lengthy dissents.  The majority concluded that mandatory arbitration agreements "purport to extinguish a substantive right to engage in concerted activity under the NLRA."  The dissents concluded that it was not the duty of the NLRB to serve as a "protector" of class action rights under other statutes.  In addition, the dissents argued that the U.S. Supreme Court has held that class action waivers are permitted by the FAA and that "the governing law could not be plainer."  At least for the moment, employers with mandatory arbitration provisions in their employee handbook will need to rewrite or delete those provisions or face the possibility of an unfair labor practice charge even without having employees represented by a union.         By Bill Harding, Chapter Attorney

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