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Battle between Fifth Circuit Court and NLRB Continues Regarding Employer Arbitration Clauses

Friday, November, 13, 2015


The dispute between the Fifth Circuit court and the National Labor Relations Board continues, after the Fifth circuit again ruled employers are not in violation of the National Labor Relations Act by requiring employees to sign arbitration agreements waiving their right to class or collection legal action.

 

The dispute began in 2012 after the NLRB found an employer violated the act by requiring employees “as a condition of employment” to sign an arbitration agreement. The Fifth Circuit unanimously reversed the decision, but in 2014 when the exact same issue came up within another company, the NLRB claimed to have “independently re-examined” the original case and re-affirmed its original decision.

 

The court then had to re-affirm its decision, stating “Our decision was issued not quite two years ago; we will not repeat its analysis here… [and we] do not celebrate the Board’s failure to follow our … reasoning.”

 

The court did not find the NLRB’s actions sanction-able.

 

The most recent court ruling puts an end to the Chesapeake Energy Corp. case in which the NLRB also re-affirmed the original ruling.

 

The most recent decision by the court failed to provide clarity for nationwide employers. Most agree the NLRB will not change its course of action unless directed to do so by the US Supreme Court.

 

Many involved are encouraging companies to find a safer alternative that allows employees to opt out of arbitration clauses, just in case. Employers are also encouraged to consult with their local legal counsel when drafting arbitration agreements offered to employees.