Like it or not, the NLRB is at least consistent in its belief that employee participation in class or collective actions is protected concerted activity under the NLRA. In a 2-1 ruling, the Board in Philmar Care, LLC., 363 N.L.R.B. No. 57 (December 11, 2015) once again reaffirmed this belief and held that employers may not utilize individual arbitration agreements that prevent employees from joining employment-related class or collective actions.
The NLRB first articulated this position in its D.R. Horton decision in January 2012. The Fifth Circuit Court of Appeals subsequently rejected the NLRB’s reasoning on multiple occasions and refused to enforce the D.R. Horton decision.
Undeterred, the NLRB doubled down on its reasoning in Murphy Oil USA, Inc., again asserting that class or collective action waivers in arbitration agreements violate the NLRA. And, once again, the Fifth Circuit Court of Appeals rejected the NLRB’s reasoning.
The Philmar Care decision should provide another Circuit Court of Appeals (likely the Ninth or D.C. Circuit) the chance to weigh in on the NLRB’s controversial position. While we await the likely appeal, 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 remains undeterred, 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. This issue arose in both D.R. Horton and Murphy Oil USA, Inc., and in both cases the employer ran afoul of the prohibition. Philmar Care avoided this issue by specifically carving out an exception for claims arising under the NLRA.