Arbitration Agreement Barring Class Litigation Violates the NLRA


On January 6, the National Labor Relations Board (Board or NLRB) issued a long-awaited decision in D.R. Horton, Inc., 357 N.L.R.B. No. 184, dealing with whether a nonunion employer’s mandatory arbitration agreement — requiring arbitration of all claims on an “individual” basis and precluding any “class” and “collective action” proceeding—violated the National Labor Relations Act (NLRA). A plurality consisting of Board Chairman Mark Pearce and Member Craig Becker ruled that home builder D.R. Horton’s mutual arbitration agreement (MAA) violated the NLRA because it required employees — as a condition of employment — to forgo class and collective action court and arbitration proceedings.

The D.R. Horton ruling was dated January 3, 2012, the last day of Member Becker’s recess appointment and the day before President Obama announced three new recess appointments to the NLRB. Board Member Brian Hayes was recused and did not participate in deciding the merits of the case.

Please see full alert below for more information.

LOADING PDF: If there are any problems, click here to download the file.

Published In: Administrative Agency Updates, Alternative Dispute Resolution (ADR) Updates, Civil Remedies Updates, General Business Updates, Labor & Employment Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Morgan Lewis | Attorney Advertising

Don't miss a thing! Build a custom news brief:

Read fresh new writing on compliance, cybersecurity, Dodd-Frank, whistleblowers, social media, hiring & firing, patent reform, the NLRB, Obamacare, the SEC…

…or whatever matters the most to you. Follow authors, firms, and topics on JD Supra.

Create your news brief now - it's free and easy »