Employee Waiver of Class Actions in Arbitration Agreements

Carol Keough February 12, 2013

On February 4, 2013, the Fifth Circuit heard argument on whether the National Labor Relations Board (NLRB) correctly ruled on January 6, 2012,   that D.R. Horton violated the National Labor Relations Act (NLRA) by maintaining a mandatory arbitration agreement which waived the rights of its employees to participate in collective or class actions.   D.R. Horton is a homebuilder.   Horton’s attorney insisted that there was no precedent under the National Labor Relations Act that would give employees a substantive right to engage in class and collective actions. The NLRB attorney argued that employees had a right to concerted action through class or collective actions for their mutual protection. This is a key case on arbitration which affects arbitration provisions of many companies throughout the United States.    Until this decision by the NLRB, companies limited employees to individual arbitration claims. This is a case to watch closely to see what the future holds for arbitration of collective or class actions.


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