Mandating Individual Arbitration: The Legality Of Class Action Waivers In Employment Arbitration Agreements

Abstract

This article explores a recurring conflict between employers and employees—whether an employment agreement can mandate individual arbitration. This paper explores the tension between the pro-arbitration stance of the Supreme Court and the pro-employee stance of the National Labor Relations Board. The NLRB maintains that individual arbitration agreements violate Section 7 of the National Labor Relations Act, which guarantees the right to engage in concerted activity. The NLRB's position conflicts with the text of the Federal Arbitration Act, which requires courts to enforce arbitration agreements according to their terms.

Recently the Seventh and Ninth Circuits became the first appellate circuits to side with the NLRB. The court took a position contrary to that of the Fifth, Second, and Eighth Circuits and created a split. Although most legal scholarship aligns with the NLRB. in this article I argue that legal and policy reasons demand that courts enforce employment arbitration agreements, even where those agreements mandate individual arbitration.

Keywords: employment, arbitration

JEL Classification: k31, k10