In a decision certain to invite legal challenge, the National Labor Relations Board (NLRB) recently held that employment arbitration agreements that require employees to waive their rights to collective or class actions violate Section 7 of the National Labor Relations Act (NLRA).

In a much-anticipated decision, D.R. Horton, Inc., 357 N.L.R.B. No. 184, the NLRB focused on the validity of a mandatory arbitration agreement that required the arbitration of all claims on an individual basis, thus foreclosing the pursuit of any collective or class action suit. Such arbitration agreements are used regularly in certain industries as a condition of employment, as employers continue to seek additional certainty and control over their litigation risks.