Board Penalizes Legal Argument

By Bill Wright

Previously, we described a court’s reaction when some plaintiff-employees tried to reinstate their collective wage claim in court using a belated NLRB order against class action arbitration waivers. (See: Court Order Trumps Board) The NLRB is trying again to limit employers’ use of individual arbitration agreements with employees. In Countrywide Financial Corp. et al., 362 NLRB No. 165 (August 14, 2015), the NLRB ruled that employers may not argue in court that their arbitration agreement with individual employees both requires arbitration and precludes class arbitrations. The setting, again, is a collective action for unpaid wages. The court compelled arbitration and left the issue of arbitration of class claims for the arbitrator to decide.

The NLRB ruled that this employer violated the NLRA by enforcing an arbitration agreement which, according to the employer’s legal analysis, barred employees from bringing a class action in any forum. This arbitration agreement is actually silent with regard to arbitrating class claims, but the employer had the audacity to argue that, according to the Supreme Court, parties can only arbitrate class claims if they agree to arbitrate such claims.

The NLRB ordered the employer to go back to court and to withdraw its objection to the plaintiffs’ pursuit of the collective claim in court. Will the employer comply? Would you? I expect an appeal.