On January 3, the National Labor Relations Board ruled that a Florida-based home builder committed an unfair labor practice by requiring employees to sign a mandatory arbitration agreement that waived their rights to participate in class or collective actions. D.R. Horton Inc. (357 N.L.R.B. No. 184, 1/3/12 [released 1/6/12]). Specifically, the agreement provided that an arbitrator “may hear only Employee’s individual claims and does not have the authority to fashion a proceeding as a class or collective action or to award relief to a group or class of employees in one arbitration proceeding.”
An employee of the home builder alleged that the agreement prevented him and other employees from pursuing wage claims under the Fair Labor Standards Act as a class or collective action in court. The NLRB agreed and held that the agreement violated Section 8(a)(1) of the National Labor Relations Act because it interfered with employees’ right to engage in protected, concerted activity. The NLRB required the employer to revise or rescind its mandatory arbitration agreement and also to provide notice to employees of the revised or rescinded agreement and of employees’ rights under the NLRA.