The U.S. 5th Circuit Court of Appeals, which covers Louisiana, Mississippi and Texas, has struck down the ban against employment arbitration clause collective-action restraints by the National Labor Relations Board (NLRB).
The January 2012 opinion by the NLRB ruled that employment arbitration clauses were unenforceable if they precluded employees from filing class or collective claims in any form.
In D.R. Horton Inc. v NLRB, the circuit court held that the NLRB stance ran counter to the Federal Arbitration Act (FAA). The court wrote that the FAA provisions "as written" were not overcome by the NLRB's legislated mandate to protect workers' rights to organize or engage in protected activities in general.
The decision, however, includes a "carve-out" that permits employees, despite the wording of the employment arbitration agreements, to file administrative charges with the NLRB and other federal agencies.
The decision thus far will be enforceable only within the three states of the court's jurisdiction, but it will no doubt lead to further judicial review in other areas of the country.
A spokesman for the NLRB said the agency is "reviewing the court's decision." However, Craig Becker, a former NLRB board member and now general counsel for the AFL-CIO, said the board's usual response is one of "non-acquiesce" to a court ruling that it believes is wrong until the Supreme Court affirms it.