Earlier this year, the National Labor Relations Board ruled that employers could not prevent workers from filing work-related claims as a class or collective action, essentially prohibiting agreements that require employees to settle disputes through individual arbitration. In the labor board’s opinion, a worker’s right to engage in concerted action with other workers for mutual aid or protection overrides a ban on class or collective claims in an arbitration agreement. The action involved a former superintendent of D.R. Horton, Inc. who alleged that the company misclassified him and others as exempt from the protections afforded by the Fair Labor Standards Act of 1938. The company argued that the employment agreement entered into with the employee prohibited collective actions.
The labor board’s decision came on the heels of AT&T Mobility LLC v. Concepcion, a 5-4 U.S. Supreme Court opinion invalidating a California rule that declared class-action waivers unconscionable. But unlike the rule at issue in Concepcion, the labor board concluded that its decision did not conflict with the Federal Arbitration Act or undermine its pro-arbitration policy. Courts have reached different conclusions on the persuasiveness of the labor board’s decision in D.R. Horton, Inc. with some perceiving a conflict with Concepcion and others noting that courts must give considerable deference to the labor board’s decisions. But the decision offers workers a fighting chance to assert work-related claims collectively despite the existence of an arbitration agreement prohibiting it. If you would like more information on this subject, contact Brad Smelser, a lawyer in our firm, at 800-898-2034 or by email at Brad.Smelser@beasleyallen.com.
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