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NLRB Says Agreement's Failure to Advise Employee of Right to File Claims with Board Violates Federal Labor Law

    Client Alerts
  • February 15, 2016

Over the past several years, the Equal Employment Opportunity Commission has sued several employers, claiming that their failure to explicitly advise employees that releases provided in conjunction with severance benefits cannot prohibit them from filing charges of discrimination with the agency. In response, employers routinely include disclaimers in their releases advising employees of their right to file EEOC charges. In a recent decision, the National Labor Relations Board adopted a similar position with the need to explicitly advise employees of their ability to file unfair labor practice claims with that agency.

In Brinker Int’l Payroll Co., L.P., the employer required employees to sign a mandatory arbitration agreement providing that disputes between the parties be submitted for binding arbitration. The agreement contained a provision stating that it “does not limit an employee’s ability to complete any external administrative remedy (such as with the EEOC).” Employees seeking to avoid application of the agreement filed an unfair labor practice claim with the NLRB, claiming among other wrongs, that the agreement’s disclaimer was not sufficient to avoid violation of Section 7 of the NLRA.

The NLRB agreed, affirming the decision of the Administrative Law Judge, who found that the agreement did not adequately advise employees of their continuing right to file claims with the NLRB. The Board concluded that the general disclaimer could be misunderstood by an average employee not conversant in employment law. The broad reference to administrative matters could mislead an employee into concluding that the arbitration agreement prohibited filing of NLRB claims.

Although this decision involved an arbitration agreement, the same reasoning would apply to post-employment releases. Employers using releases with notice of continuing EEOC filing rights would violate Section 7, even if the disclaimer more generally refers to the employee’s ability to file claims with government agencies. Presumably, the employer would need to individually list every government agency with whom the employee could conceivably file an administrative claim in order to avoid allegations that the release is misleading.

As with many recent NLRB decisions, federal appellate courts have not yet agreed with the Board’s reasoning on this point. However, employers desiring to avoid possible NLRB claims should consider amending their releases and arbitration agreements to specifically reference employees’ continuing ability to file NLRB claims.