Circuit Court Reverses NLRB Limitations on Alternative Dispute Resolution Agreements

December 06, 2013

In a blow to the Obama NLRB's expansive interpretation of "protected concerted activity,” the Fifth Circuit has overturned the NLRB's 2012 decision in D.R. Horton that the company violated the National Labor Relations Act by requiring its employees to sign an arbitration agreement that, among other things, prohibited an employee from pursuing class action claims.  The court ruled that the Board had not given proper weight to the Federal Arbitration Act, which "establishes 'a liberal federal policy favoring arbitration agreement' . . . [with the purpose of ensuring] 'the enforcement of arbitration agreements according to their terms.'"  Though this clearly is one of the major components of the Board's expansion of "protected concerted activity" (PCA), its unique interplay with the Federal Arbitration Act probably limits its significance regarding other PCA cases involving social media, workplace investigations, etc.  Nevertheless, it does serve as a reminder to the Board that the National Labor Relations Act does not operate unilaterally to the detriment of other laws and policies.  HR Policy filed an amicus brief in support of D.R. Horton.