56 Pages Posted: 10 Mar 2014 Last revised: 11 May 2017
Date Written: March 9, 2014
When employees sign employment agreements, they are most likely not concerned about a mandatory arbitration provision forbidding them from engaging in class or collective actions. The United States Supreme Court has shown a strong preference for enforcing arbitration agreements, even when they foreclose rights to collective action. The National Labor Relations Board, however, has found that individual employment agreements may not prevent employees from engaging in protected concerted activity in both union and nonunion environments. The Board ruled in D.R. Horton that individual, as opposed to collectively bargained, arbitration agreements that are a condition of employment, may not bar collective action through both arbitral and judicial forums. The Board reasons that Section 7 of the National Labor Relations Act mandates the preservation of rights to collective activity, and that the Supreme Court’s strong preference for individual arbitration must accommodate the text and legislative history of the Act. Despite the Board’s decision, most federal courts have declined to strike down mandatory arbitration agreements that foreclose collective action, even when it means undermining rights under federal wage and hour statutes as well as employees’ NLRA rights. The authors support the NLRB’s interpretation as the correct and preferred framework for analysis of NLRA challenges to forced individual arbitration. The authors maintain that the courts should recognize that the Board’s decision is consistent with Supreme Court precedent and adopt the reasoning of the NLRB to preserve substantive federal statutory rights of private sector employees.
Keywords: national labor relations board, national labor relations act, D.R. Horton, NLRA, concepcion, Lafe Solomon, NLRB, employer, employee, board, mandatory arbitration agreement, protected concerted activity, supreme court, canning, section 7, section 8, federal arbitration act, FAA
JEL Classification: J5, K1, K2, K3, K31, K4, L5, M5
Suggested Citation: Suggested Citation
Greene, Stephanie M. and O'Brien, Christine Neylon, The NLRB v. The Courts: Showdown over the Right to Collective Action in Workplace Disputes (March 9, 2014). American Business Law Journal, Vol. 52, No. 1, Spring, 75-130 (Spring 2015). Available at SSRN: https://ssrn.com/abstract=2406577