NLRB Defends D.R. Horton Decision Before Fifth Circuit

by Labor Management Relations Practice Group on September 17, 2012

By Chip McWilliams

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The National Labor Relations Board filed a brief with the Fifth Circuit Court of Appeals on September 4, 2012, defending its decision in D.R. Horton Inc., 357 NLRB No. 184 (Jan. 3, 2012), and asking the court to enforce its original decision and order.

In D.R. Horton, the NLRB held that an arbitration agreement requiring employees to waive “as a condition of employment” their right to bring a joint, class or collective action violates Section 8(a)(1) of the National Labor Relations Act, which protects the rights of employees to engage in concerted, protected activity. Significantly, for purposes of the appeal to the Fifth Circuit, the NLRB reached this decision in a 2-0 vote on January 3, 2012, which was the final day of recess appointee Craig Becker’s term.

The employer petitioned the Fifth Circuit for review on January 13, 2012, and the NLRB cross-applied for enforcement of its order on March 19. There are three issues on appeal: (1) whether the NLRB reasonably found that the employer violated Section 8(a)(1) of the NLRA by maintaining a mandatory arbitration agreement that waives employees’ right to pursue employment-related claims in a concerted manner in any forum; (2) whether the NLRB reasonably found that the employer violated Section 8(a)(1) of the NLRA by maintaining a mandatory arbitration agreement the employees could reasonably interpret as restricting their right to file unfair labor practice charges before the NLRB; and (3) whether the Board’s order, based on a 2-0 vote, was validly issued.

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NLRB General Counsel Policy Change Would Limit Arbitration Deferral

by Stefan Marculewicz on January 23, 2012

Thumbnail image for NLRB seal.gifThe National Labor Relations Board’s Office of the General Counsel has once again directed changes to the Board’s arbitration deferral policy. In a memorandum (doc) issued on January 20, 2012, Acting General Counsel (GC) Lafe Solomon seeks to prevent the routine deferral of Section 8(a)(1) and 8(a)(3) cases to arbitration if resolution of these unfair labor practice (ULP) charges by arbitration cannot be achieved within one year. The GC would apply this change in policy to cases that have already been deferred to arbitration – but have been pending for more than one year – as well as new cases in which there are indications that resolution via arbitration would likely take considerable time. The new policy would apply only in situations in which grievance-arbitration procedures are already explicitly laid out in a collective bargaining agreement. The new deferral policy would also apply – albeit under very limited circumstances – to cases involving allegations of contractual violations under Section 8(a)(5).

Under the long-standing arbitration deferral policy, as established by the decision Collyer Insulated Wire, the Board defers making a final determination on certain ULP charges when a grievance involving the same issue(s) can be processed under the grievance/arbitration provisions of the parties’ collective bargaining agreement. The purpose of doing so, according to the Board, is to encourage collectively-bargained dispute resolution. In January of last year, the GC first sought to amend Collyer deferral by instructing NLRB regional offices not to “defer to an arbitral resolution unless it is shown that the statutory rights have adequately been considered by the arbitrator.” According to a Board press release, the new directive builds upon these earlier changes.

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NLRB Strikes Down Arbitral Class Action Waiver

by Labor Management Relations Practice Group on January 12, 2012

Prohibited.pngIn D.R. Horton, Inc., (pdf) the National Labor Relations Board, by a 2-0 vote, found that an arbitration agreement requiring "as a condition of employment" all employees to agree to waive the right to bring class or collective actions in any forum violated Section 8(a)(1) of the National Labor Relations Act (NLRA), which guarantees the rights of employees to engage in concerted, protected activity. The decision was issued by Board Chairman Mark Pearce and Member Craig Becker on January 3, 2012, the final day of Member Becker's controversial recess appointment. Republican Board Member Brian Hayes was recused and did not participate in deciding the merits of the case. The decision has potentially wide-ranging implications for employers who have required employees to agree to arbitrate their disputes and at the same time waive the right to pursue their claims on a class or collective basis. The decision, however, also leaves open the possibility that agreements that are not "imposed" on employees may yet be enforceable, even if those agreements ban class or collective actions in any forum. Continue reading about this development here.

NLRB General Counsel Urges Changes to Arbitration Deferral Process

by Stephen D. Smith on January 24, 2011

iStock_000004637317XSmall2.JPGThe General Counsel’s office of the NLRB has issued a memorandum – Guideline Memorandum Concerning Deferral to Arbitral Awards and Grievance Settlements in Section 8(a)(1) and (3) Cases – that urges the Board to adopt a new approach to its arbitration deferral policy. Under the current deferral policy, as established by Collyer Insulated Wire, 192 NLRB 83 (1971) and United Technologies Corp., 268 NLRB 557 (1984), the agency defers making a final determination on certain unfair labor practice (ULP) charges when a grievance involving the same issue(s) can be processed under the grievance/arbitration provisions of the parties’ collective bargaining agreement. The purpose of doing so, according to the Board, is to encourage collectively-bargained dispute resolution.

The GC’s memo, however, claims that the current deferral process does not sufficiently safeguard employees’ Section 7 rights under the National Labor Relations Act. The memo explains that Supreme Court cases dealing with non-labor employment rights have required a showing that the arbitrator was explicitly authorized to decide the underlying statutory issue and applied the appropriate statutory standard, before giving effect to the award. The GC claims that in contrast, the Board’s standards for accepting an arbitrator’s decision as a final resolution of an NLRA dispute are “overly deferential.” In Olin Corp., 268 NLRB 573 (1984), the Board ruled that an arbitration award is to be considered a final resolution of the matter so long as the contract and statutory issues were “factually parallel” and the arbitrator was “presented generally with the facts relevant to resolving the unfair labor practice.”

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U.S. Supreme Court Refuses to Require Arbitration Over Date of Formation of Collective Bargaining Agreement, Remands Federal Claim Against the International Union

by Jack Lambremont on June 25, 2010

On June 24, 2010, the U.S. Supreme Court issued a pro-employer opinion in Granite Rock, Inc. v. International Brotherhood of Teamsters, et al., (pdf) providing valuable guidance on the arbitrability of disputes over the timing of the formation of collective bargaining agreements.

The Court (7-2) held that the question of exactly when the parties formed an agreement to arbitrate certain disputes was not itself subject to resolution through arbitration. The Court also declined to recognize Granite Rock’s cause of action under Section 301 of the Labor Management Relations Act (LMRA) against the International Brotherhood of Teamsters’ (IBT) for tortious interference with a collective bargaining agreement. The Court remanded the case to the lower court to allow Granite Rock to proceed against the International on the theory that the local union was acting as the IBT’s agent when it refused to abide by the no-strike clause of the parties’ collective bargaining agreement.

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NLRB Guidance Memorandum Addresses Class Waivers in Mandatory Arbitration Agreements

by Labor Management Relations Practice Group on June 23, 2010

The National Labor Relations Board’s (NLRB) general counsel (GC) has issued guidance (pdf) to the agency’s regional officers and directors on how to process unfair labor practice (ULP) charges involving employee class action waivers in mandatory arbitration agreements. The GC explained that questions have arisen “regarding the validity of mandatory arbitration agreements that prohibit arbitrators from hearing class action employment claims while at the same time requiring employees to waive their right to file any claims in a court of law, including class action claims.” In essence, the GC concluded that such class action waivers do not per se violate the National Labor Relations Act’s (NLRA) provisions allowing employees to engage in protected, concerted activity, but that certain principles must be followed.

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