In 2018, the United States Supreme Court issued its opinion in Epic Systems Corp. v. Lewis, 138 S.Ct. 1612 (2018) ruling that class action waivers in mandatory arbitration agreements are valid, and that they do not violate the National Labor Relations Act (“Act”). For the first time, the National Labor Relations Board (“Board”) issued an opinion related to mandatory arbitration agreements. Cordua Restaurants, Inc., 368 NLRB No. 43 (2019).
The Board held that the Act does not prohibit employers from threatening to fire an employee who refuses to sign a mandatory arbitration agreement. The Board also determined that because a class action waiver does not restrict the right to engage in collective activity, an employer can impose an arbitration agreement in response to employees opting into a class action under the Fair Labor Standards Act (“FLSA”) or state wage and hour laws. However, an employer cannot take adverse action against an employee for filing a class action lawsuit.
This is a very positive development for employers. We encourage all employers to adopt arbitration agreements with class action waivers.
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