Following years of uncertainty, the U.S. Supreme Court will soon decide the legality of arbitration agreements that prohibit employees from joining employment-related class or collective actions. The NLRB has consistently argued that employee participation in class or collective actions is protected concerted activity and that agreements barring such participation constitute an unfair labor practice.
The courts, meanwhile, have been less consistent. The Fifth Circuit Court of Appeals has rejected the NLRB’s position on multiple occasions. However, the Seventh and Ninth Circuits have both backed the NLRB. On January 13, 2017, the U.S. Supreme Court granted certiorari to resolve this circuit split.
In response to this decision, the NLRB’s General Counsel recently released a memorandum instructing Regional Directors to pursue informal settlement of unfair labor practice charges involving arbitration agreements with class or collective action waivers. Specifically, Regions are to propose informal settlements conditioned on the NLRB prevailing before the U.S. Supreme Court. If a charge involves additional unrelated issues, the NLRB has instructed Regions to move forward on those unrelated issues as usual. Finally, if a charge involves a class or collective action waiver that an employer argues is distinguishable from those at issue before the Court, then Regions are to hold such cases in abeyance.