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NLRB Says Arbitration Agreement Must Specifically Exclude Claims Filed With NLRA

    Client Alerts
  • December 11, 2019

In its decision last term in Epic Systems Corp. V. Lewis, the U.S. Supreme Court concluded that the National Labor Relations Act does not preclude the use of mandatory arbitration agreements in employment which prevent class and collective actions. However, that decision did not end employees’ challenges to specific terms of such agreements under federal labor law. Last month, the National Labor Relations Board concluded that an arbitration agreement that appeared to prohibit employees from filing administrative claims with the agency violated the NLRA.

In Everglades College, Inc. d/b/a Keiser University, the employer required all employees to sign mandatory arbitration agreements. In addition to waiving the right to pursue class action claims, the board majority concluded that the agreements could be reasonably interpreted by employees to bar them from filing complaints with the NLRB. The agreements contained general language that made their terms inapplicable to claims or actions where specifically prohibited by law. However, the board majority said that this language was vague, and did not advise employees as to whether they remained free to complain to the agency.

Employers using mandatory arbitration agreements and employment releases should include language specifically stating that nothing in those agreements prohibits employees from making complaints to government agencies, including the NLRB and EEOC (if the employer is publicly held, this language should also include the Securities and Exchange Commission). Failure to include this specific exclusion could open the employer to retaliation and unfair labor practice claims.