The long awaited decision by the Fifth Circuit regarding the NLRB’s D.R. Horton case issued this week in which the Court bypassed a number of jurisdictional issues and went straight to the heart of the matter. In sum, the Court found that the Board’s finding that a class action waiver in conjunction with a mandatory arbitration provision regarding employment claims was not, per se, a violation of the National Labor Relations Act. In other words, such a policy, like any employment policy, must be reviewed in context. In particular, even though such a policy on its face is not unlawful, if it is written in a fashion that would violate the Act so that it might chill employees’ Section 7 rights, then it would be found unlawful. Because the particular policy in the D.R. Horton matter was overly broad regarding the actual application of such a policy, the Court of Appeals found it unlawful.
Hence, all such policies need to be reviewed to ensure they are not overly broad in nature and include, at a minimum, a carve-out regarding matters that could be presented before the NLRB. Hopefully, the NLRB will take this opportunity to develop a guideline memorandum for employers to utilize in drafting appropriate language for such policies, as this year a NLRB Administrative Law Judge ruled that, notwithstanding a carve-out of NLRB claims under such a policy, it still ran afoul of the NLRA. So such guidance is necessary for employers to develop lawful policies in this area and avoid future litigation.
For additional information, please contact Terry Potter or Joe Orlet.