Fifth Circuit Denies NLRB Petition to Review D.R. Horton. What It Means for Employers...

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The decision affects every employer with an arbitration agreement and every employer that wants to avoid class and collective actions, which should be all of them.

Ron Chapman, Jr., a shareholder and member of the board of directors at law firm Ogletree Deakins, is the lead attorney representing D.R. Horton, Inc. in the company’s suit against the National Labor Relations Board. We asked Chapman for his First Glance response to today’s Fifth Circuit ruling denying the NLRB’s petition for a rehearing in the case. Here’s what we heard back:

Why does this denial matter?

Chapman: With today's ruling, class action waivers have withstood another legal challenge. Previously, in a 2-1 decision, the Fifth Circuit endorsed the use of class action waivers in arbitration agreements, rejecting the NLRB's novel contention that such provisions violate employees' rights under Section 7 of the NLRA to engage in concerted activity. The NLRB petitioned for en banc review, but today's order from the Fifth Circuit denied that request. Significantly, the Fifth Circuit did so without even asking for a response from the employer in the case, perhaps signifying a level of clarity in this important legal issue.

Who is impacted?

Chapman: The decision affects every employer with an arbitration agreement and every employer that wants to avoid class and collective actions, which should be all of them. Arbitration agreements are not necessarily right for every employer, but with the validity of class action waivers now established, every employer should at least consider adopting an arbitration agreement with a class action waiver.

Additional updates on NLRB v. Horton available here>>

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[JD Supra's new First Glance series asks experts for their early response to breaking news stories. Stay tuned for additional updates in the series. Looking for insights? Send suggestions to news@jdsupra.com.]


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.

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