NLRB Comes Down On Class Action Waivers

A Barnes & Thornburg client alert discusses a recent decision from the National Labor Relations Board. The party involved was a familiar name – Hobby Lobby, which was also a party to the widely covered 2014 Supreme Court decision upholding religious exemptions to some legal requirements – but this NLRB decision had to do with a far more common scenario. A Board administrative law judge has ruled employers may not require employees to agree to mandatory arbitration that includes class and collective action waivers, because such an agreement would violate the National Labor Relation Act’s protection of workers’ “concerted activity” to promote their rights. This is not the first time the NLRB has taken this position, the writers explain, but in some important respects it goes farther than the earlier decisions. The employer in this case was also ordered to pay the plaintiffs’ attorneys’ fees and litigation costs.