The NLRB let pass a July 15 deadline to seek Supreme Court review of a federal appeals court decision rejecting the Board's position on class action waivers in arbitration agreements. The Board continues to advance its position that employees have a Section 7 right under the NLRA to pursue arbitration on a class, collective or group basis, and not to be subject to a class or collective action waiver in a private arbitration agreement. However, its position has been rejected by three federal appellate courts, including the U.S. Court of Appeals for the Fifth Circuit in the highly publicized D.R. Horton case that we have reported on here and here. The Board's decision not to seek review means that D.R. Horton will remain the law in the Fifth Circuit states of Louisiana, Mississippi, and Texas. Two other federal appeals courts have rejected the NLRB's position on this issue as well: the U.S. Court of Appeals for the Second Circuit (Connecticut, New York, and Vermont), and the U.S. Court of Appeals for the Eighth Circuit (Arkansas, Iowa, Minnesota, Missouri, Nebraska, and the Dakotas). In addition, the Ninth Circuit, although not having definitively decided the issue, has indicated that it might join the Second, Fifth, and Eighth circuits. The Ninth Circuit hears appeals from federal courts in Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon, Washington, Guam, and the Northern Mariana Islands.
Apparently, the Board is content to continue to assert its position through unfair labor practice cases outside the Second, Fifth, and Eighth circuits. Otherwise, it runs the risk that the Supreme Court will invalidate its position in all 50 states. The Board recently found the Supreme Court to be a tough audience in the Noel Canning case, so it may be looking for a case with better facts or, as is more likely, it may be hoping for changes on the Court before the issue gets there.
Employers who have or are contemplating class waivers in arbitration agreements will want to keep an eye on this issue.