By Emily Keimig
Despite the NLRB’s stated hostility toward class action waivers between employers and employees, the courts continue to support arbitration agreements that include class action waivers. In a recent case, the plaintiff sued Bristol Care on behalf of herself and other co-workers, for alleged violations of the Fair Labor Standards Act (“FLSA”) because, she claimed, Bristol Care had improperly classified certain administrators as “exempt” employees for purposes of state and federal overtime laws. However, the plaintiff had signed a Mandatory Arbitration Agreement (“MAA”) that (1) required her to arbitrate “any…legal theory” she might bring against Bristol, including a theory of FLSA violations; and (2) also precluded arbitration of any class claims (“the class waiver”). Despite the MAA, the plaintiff filed suit in federal court. Bristol Care moved to compel arbitration.
The district court had denied Bristol Care’s motion, relying on the NLRB’s decision in D.R. Horton, Inc.. The district court, and the NLRB, reasoned that class waivers conflict with employee rights (whether union-represented or not) protected by Section 7 of the National Labor Relations Act. Because the MAA had a class waiver, the district court refused to enforce the MAA.
However, the Court of Appeals rejected the district court’s reasoning, and whole-heartedly joined the trend of judicial friendliness toward arbitration agreements, even those with class action waivers. The Court of Appeals flatly rejected the plaintiff’s argument that the Court should join or endorse the NLRB’s theory in D.R. Horton. Owen v. Bristol Care, Inc., No. 12-1719 (8th Cir. January 7, 2013).
The NLRB’s positions continue to fall outside the mainstream on employer rights—all the more reason to be wary when the Board becomes involved in your business.