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.