Fifth Circuit Refuses NLRB’s Request to Rehear D.R. Horton

By Ben Shepler

The NLRB is now 0 for 2 in the Fifth Circuit Court of Appeals.  In a victory for employers, the Fifth Circuit recently refused to rehear (pdf) its December 2013 decision rejecting an NLRB ruling that questioned the wide-spread practice of having employees sign arbitration agreements that bar class or collective actions. 

In D.R. Horton, Inc. v. NLRB, the Fifth Circuit considered the NLRB’s January 2012 ruling which held that homebuilder D.R. Horton, Inc. committed an unfair labor practice by requiring employees to sign a mandatory arbitration agreement that (1) forced employees to submit employment-related disputes to binding arbitration and (2) prohibited the arbitrator from considering these disputes as part of a class or collective action.  The Fifth Circuit rejected this analysis, although it did agree with the NLRB that D.R. Horton’s arbitration policy improperly gave the impression that employees were prohibited from filing unfair labor practice charges with the NLRB. 

At this time, the NLRB has not indicated whether it will appeal the Fifth Circuit’s decision to the United States Supreme Court.  While we await word, labor professionals should review all individual, non-collectively bargained arbitration policies.  In particular, labor professionals should:

• Determine whether to include a class or collective action waiver in their arbitration agreements.  Although the NLRB may not give up without a fight, the clear weight of legal authority supports enforcement of class or collective action waivers in arbitration agreements.
• Make certain that their arbitration policies allow employees to file unfair labor practice charges with the NLRB.  The NLRA prohibits arbitration policies that would reasonably lead employees to believe that they are prohibited from filing unfair labor practice charges with the NLRB.