NLRB, Fifth Circuit Continue Disagreement Regarding Class Arbitration Waivers

In early February, the National Labor Relations Board (“NLRB”) once again ruled that a class action waiver included in a mandatory arbitration agreement workers were required to sign as a condition of employment violated federal law. In Waffle House, Inc. and Carrie Harris, No. 10–CA–121178, a divided three-member panel found that the arbitral provision at issue violated the National Labor Relations Act.

According to the Board,

By maintaining a mandatory arbitration agreement that requires employees, as a condition of employment, to waive the right to maintain class or collective actions in all forums, the Respondent has violated Section 8(a)(1) of the Act and has thereby engaged in unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act.

As a result, the NLRB ordered the Waffle House to remove the collective action waiver from the mandatory agreement.

In response to the NLRB’s decision, the Waffle House filed a petition for review with the Fifth Circuit Court of Appeals. In the past, the appellate court has repeatedly sided with various employers on the same issue. In its petition, Waffle House argued “The NLRB’s Decision and Order against the Petitioner is not supported by substantial evidence and is contrary to law.”

On February 26th, the Fifth Circuit issued an order granting the employer’s “unopposed motion to stay further proceedings in this court for judicial economy, pending the outcome of Murphy Oil USA, Inc. v. NLRB, case No. 14-60800.” You can read more about the Murphy Oil case in a prior Disputing blog post.

Photo credit: Nicholas Eckhart via Foter.com / CC BY