Sign It or You’re Fired: Mandatory Arbitration Agreements Expanded Further by the NLRB

As arbitration continues to grow in popularity in today’s society, the U.S. Supreme Court and the National Labor Relations Board (Board) remain active in determining employers’ rights and obligations regarding arbitration agreements and arbitration clauses in their employment or independent contractor agreements. In May 2018, the Supreme Court held in Epic Systems v. Lewis (U.S. 2018) that mandatory arbitration agreements with class-action waivers did not violate the National Labor Relations Act, and were therefore enforceable. On August 14, 2019, the majority pro-employer Board expanded Epic Systems providing employers with another avenue to reduce expensive litigation. Employers can now require employees to sign arbitration agreements after a collective action has been filed in order to reduce the possibility of other employees joining into the suit. Employers can also warn employees that they will be fired if they don’t sign the mandatory arbitration agreements. The requirement that employees agree to arbitrate rather than proceed in court is lawful. However, the Board also restated that employers are prohibited from taking adverse action against employees for filing a class or collective action or engaging in other protected concerted activity.