Yesterday's decision by the U.S. Court of Appeals for the Fifth Circuit in D.R. Horton, Incorporated v. National Labor Relations Board, is a victory for employers who seek to chanel work related disputes (other than NLRB charges) into an arbitration system which does not permit class action claims in either the arbitration or in court. But the decision is not a knock-out punch in the first round. Instead, the Board and the NLRB General Counsel will very likely continue to apply the Board’s decision in D.R. Horton.
This is because the NLRB follows the doctrine of non-acquiescence. That is, the Board will not back away from a legal ruling simply because it has been rejected by a single, or perhaps even a group, of circuit courts of appeals. The Board exercises national jurisdiction over application and enforcement of the National Labor Relations Act. Circuit courts (unless granting or sustaining a nationwide injunction or some similar circumstance) generally issue decisions that are legally binding only in their respective territorial jurisdictions. There are eleven circuit courts of appeals, and the Fifth Circuit is the first one to review the D.R. Horton issue directly on appeal from the Board. (As the Fifth Circuit panel pointed out, however, there are a few other courts of appeals which have refused to defer to the Board’s D.R. Horton decision in cases involving enforcement of arbitration agreements.)
It is highly likely that the Board will want this issue to play out in other cases in other courts of appeals. If a significant number of courts continue to reject the Board’s approach, then the Board may consider overruling or modifying the D.R. Horton doctrine in the future. (It should be noted that an adverse decision from the District of Columbia Circuit may speed up this process, because any charged party respondent who loses before the Board can appeal to the District of Columbia Circuit.)
A change in Board membership also may trigger the occasion for a decison overruling D.R. Horton. Or, a split may develop among the circuit courts of appeals and the Supreme Court may have to weigh in. It is also possible that the Board may seek rehearing from the a panel consisting of all the judges sitting on the Fifth Circuit in an effort to get the court to reverse itself, or — less likely — the Board may seek a writ of certiorari from the Supreme Court now.
But in any event, as noted, it is safe to expect that the General Counsel and the Board will continue to apply the Board’s decision in D.R. Horton, at least for the foreseeable future.