Agreement to Arbitrate Disputes Which Prohibits All Joint, Class or Collective Claims Violates the National Labor Relations Act
January 12, 2012
The expense and time involved in defending employee lawsuits in court has led many employers to require employees to sign agreements requiring them to resolve claims by arbitration rather than by litigation. Last week, the National Labor Relations Board ("Board") held one such agreement to be illegal. The Board ruled that an employer violated the National Labor Relations Act ("Act") by requiring employees to sign an agreement that (1) required all employment claims and disputes to be resolved through arbitration, rather than in court or another forum, and (2) prohibited employees from arbitrating claims collectively (allowing only individual, not group claims). The Board reasoned that the employer's agreement violated employees' rights to engage in concerted action for mutual aid or protection.
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