Do Class Action Waivers in Individual Arbitration Agreements Violate Labor Law?
By Ted Olsen
In recent issues of this newsletter, we have discussed the effort by some employers - while entering into agreements with their individual employees mandating the arbitration of any and all disputes - to avoid the arbitration of "class actions" or "class claims." In general, employers and businesses oppose class arbitration, and do not include class claims within the scope of arbitrable claims (or expressly exclude class claims from the scope of arbitrable claims). Some employers are hopeful that, by requiring all employees to sign mandatory arbitration agreements, and by including a class action waiver in the arbitration agreements, class claims (or at least class claims in arbitration) effectively will be eliminated.
Just before resigning as NLRB General Counsel (see, "New NLRB General Counsel Named," above), Ronald Meisburg, issued a "Guideline Memorandum Concerning Unfair Labor Practice Charges Involving Employee Waivers in the Context of Employers' Mandatory Arbitration Policies," NLRB Memorandum GC 10-06 (June 16, 2010), suggesting that employers may violate the Labor Management Relations Act when requiring employees to sign arbitration agreements prohibiting the arbitration of "class claims." Although this Guideline Memorandum is not at all conclusive on the matter, especially when it represents the policy views of a former General Counsel, it raises points to be considered when attempting to prevent class arbitrations.
The basic premise of the Guideline Memorandum is that, when employees band together for the purpose of mutual aid and protection, including the filing of lawsuits to improve working conditions, they are engaged in so-called Section 7 concerted protected activity under the Labor Management Relations Act. Prohibiting employees from engaging in such activity is unlawful.
Based on this premise, General Counsel Meisburg reached the following conclusions:
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©2010 Sherman & Howard L.L.C. July 7, 2010