The National Labor Relations Board (NLRB) has issued a series of decisions in the last few months that include new parameters for arbitration agreements containing class and collective action waivers. These decisions follow the U.S. Supreme Court’s May 2018 decision in Epic Systems v. Lewis, 84 U.S. __, 138 S.Ct. 1612 (2018), where the court held that such employer-employee agreements mandating that employment disputes be resolved through individualized arbitration do not violate the National Labor Relations Act (NLRA) and must be enforced as written, pursuant to the Federal Arbitration Act (FAA). Epic Systems arose out of a dispute in which the NLRB took the position that employer-mandated arbitration agreements requiring that employees waive the right to engage in class or collective litigation are unenforceable. The NLRB argued that Section 7 of the NLRA protects an employee’s right to engage in protected concerted activity, which includes litigating employment-related disputes as class or collective actions. The NLRB also argued that Section 7 protects employees’ rights to engage in protected concerted activity. The Supreme Court rejected these positions and focused on the fact that Section 7 does not mention class or collective procedures and does not express any disapproval of arbitrations.
Nevertheless, on June 18, the NLRB found that an arbitration agreement that required employees to arbitrate “all claims and controversies” with their employer unlawfully restricted employees’ access to the NLRB to adjudicate labor disputes. See Prime Healthcare Paradise Valley, 368 NLRB 10 (2019).
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