NLRB Reaffirms Noel Canning Position on Use of Class Waivers in Arbitration Agreements
- November 14, 2014
In its Noel Canning decision earlier this year, the U.S. Supreme Court vacated numerous decisions made by the National Labor Relations Board based on lack of a required quorum. The Court decided that President Obama’s recess appointments to the NLRB and other federal administrative agencies were invalid based on constitutional restrictions on this power of appointment.
Earlier this month, in Ampersand Publishing, LLC, a fully appointed and confirmed NLRB reconsidered the substantive claims that were at issue in the original Noel Canning litigation. The case involved an employer that used mandatory arbitration agreements with its employees. Like many such agreements, employees agreed to waive their rights to arbitrate as a class rather than individuals.
In a 2-1 decision, the NLRB affirmed its original position that such class waivers violate Section 7 of the National Labor Relations Act, because they interfere with employees’ ability to collectively pursue claims against their employers. The NLRB majority did not issue a new opinion, and instead incorporated the prior Noel Canning reasoning by reference.
With the procedural issues out of the way, this issue now shifts to federal courts for a determination of the validity of the NLRB’s position. A number of federal courts have already contradicted Noel Canning, finding that federal laws broadly favoring arbitration of claims outweigh the possible NLRA issues raised by the Board. If federal appellate courts eventually take opposing stands on this issue, it may be up to the Supreme Court to provide the final word.