We had noted in a previous blog post about arbitration agreements in October that a pair of U.S. Supreme Court decisions had many legal analysts saying we were hearing the death rattle of the class action lawsuit. Employers were seemingly emboldened when the Court ruled in AT&T Mobility vs. Concepcion that under the Federal Arbitration Act, California must enforce arbitration agreements—even if the agreement requires that consumer complaints be arbitrated individually (instead of on a class-action basis). However, a January 3, 2012, ruling by the National Labor Relations Board (NLRB) might have turned that decision on its head.
The New York Times reported on January 6, 2012, “In a decision that will no doubt anger many companies, the labor board concluded that a federal law protecting workers’ right to engage in concerted action trumps any arbitration agreement that bars them from bringing group claims.” The United States Chamber of Commerce and other business groups argued in opposing briefs that the labor board should defer to that AT&T Mobility decision. But the Times said the “labor board distinguished its case by saying that the Federal Arbitration Act did not trump the National Labor Relations Act [NLRA], the landmark 1935 law that gave workers a federally protected right to unionize and engage in concerted action.”
Professor Alex Colvin, an expert on mandatory arbitration agreements who teaches at the Cornell School of Industrial and Labor Relations, told the Times that the ruling “is a big deal.” “Mandatory arbitration agreements are so widespread, and this would suggest that many of them violate labor law by barring class actions,” Colvin told the Times. “I also think the business community will be up in arms because you have federal labor law being applied in a nonunion setting.”
As encouraging as the NLRB ruling is, it is also likely to be appealed by business groups with a showdown that could drastically affect the NLRA’s ability to protect workers’ collective efforts to protect their interests.
Stanley Iola – Class action attorneys
Tags: arbitration agreements, class action attorneys, class action lawsuit, Federal Arbitration Act, national labor relations act, national labor relations board, nlra, nlrb, U.S. Supreme Court, united states chamber of commerce