NLRB: An employer’s “sign this arbitration agreement or you’re fired” edict is totally cool with us

What a difference a few years make.

Two years, Richard Griffin, the former General Counsel of the National Labor Relation Board (“NLRB“), stood before the U.S. Supreme Court and argued in Epic Systems v. Lewis that arbitration agreements requiring employees to forego the ability to pursue collective or class action claims violate the National Labor Relations Act (“NLRA“).

He was wrong. Don’t just take my word on it; five out of nine Supreme Court justices said so in this 2018 opinion.

Since then, the NLRB has routinely dismissed complaints alleging that employers unlawfully maintained and/or enforced arbitration agreements that require employees, as a condition of employment, to waive their right to pursue employment
disputes through class or collective actions.

But can an employer…

  • Straight up tell an employee that failing or refusing to sign a mandatory arbitration agreement will result in their discharge?
  • Force employees to sign mandatory arbitration agreements in response to employees opting in to a collective action under the Fair Labor Standards Act or state wage-and-hour laws?

Yes and yes. That according to none other than the NLRB in an opinion (here) issue yesterday. That’s the same NLRB that is tasked with enforcing the NLRA.

And, no, the NLRA does not just apply to unionized employers. Odds are, if you run a private business, the NLRA covers your workplace even if you don’t have a union.

But there are limits to the reach of the Epic Systems decision. For example, what you can’t do is fire or otherwise discipline employees because they filed a class or collective action. That would chill their rights to engage with one another to address the terms and conditions of employment.

Otherwise, employers have options at their disposal to limits exposure to class and collective actions.


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