NLRB Challenges Mandatory Arbitration Provisions


Employers should check handbooks or other policies include provisions that require employees to agree to mandatory individual arbitration or other waivers of rights to sue, file regulatory charges or seek other remedies should evaluate the advisability of updating those policies in light of recent National Labor Relations Board (NLRB) actions like those announced yesterday (April 30, 2012) against 24 Hour Fitness USA, Inc. (24-Hour Fitness).

In D.R. Horton, Inc., 357 NLRB No. 184, the Board earlier this year found that the employer, a home building company, violated Section 8(a)(1) of the Act by maintaining, as a condition of employment, a mandatory arbitration agreement that did not allow its employees to file joint, class, or collective employment-related claims in any forum, arbitral or judicial.

As a follow-up to that decision, the NLRB now is charging 24-Hour Fitness with violating federal labor law by insisting that all employment-related disputes be resolved by individual arbitration.  A California-based corporation which operates fitness centers across the country, 24-Hour Fitness requires employees to agree in writing, as a condition of employment, to forego any rights to “collective or class action” lawsuits or arbitrations.  Applying the rule it adopted earlier this year in D.R. Horton, Inc., 357 NLRB No. 184, the NLRB is charging this violates the collective bargaining and organizational rights of the National Labor Relations Act (NLRA).

The charges against 24-Hour Fitness stem from a charge filed by an employee at the 24 Hour Fitness center in San Ramon, California. Since at least the summer of 2010, the NLRB claims that the company has enforced its no-class-action policy by asserting it in litigation brought by employees in many cases, seven of which are cited in the complaint. In each case, employees, sought to bring workplace-related claims, such as wage and hour violations, on a class-wide basis. In response, 24-Hour Fitness sought to compel the employees to submit their common claims to individual arbitrations, citing the policy in its handbook.

The complaint calls for a hearing before an Administrative Law Judge on June 11, and seeks an order requiring the company’s fitness centers nationwide to stop maintaining and enforcing that portion of the policy that prohibits collective and class action, and to notify all judicial and arbitral forums in which it has opposed such action. 

The NLRB position regarding mandatory arbitration policies is of a series of activist positions that it has taken over the past year.  In light of this growing activism, employers should continue to strengthen their labor-management policies and practices to mitigate the growing labor exposures that result from this activist agenda. 
 
For Help or More Information
If you need help with labor and employment or other human resource, performance management, internal controls or compliance and risk management matters, please contact the author of this article, Cynthia Marcotte Stamer.  Board Certified in Labor & employment Law by the Texas Board of Legal Specialization,management attorney, author and consultant  Ms. Stamer is nationally and internationally recognized for more than 24 years of work helping private and governmental organizations and their management; employee benefit plans and their sponsors, administrators, fiduciaries; employee leasing, recruiting, staffing and other professional employment organizations; schools and other governmental agencies and others design, administer and defend innovative compliance, risk management, workforce, compensation, employee benefit, privacy, procurement and other management policies and practices. Her experience includes extensive work helping employers carry out, audit, manage and defend worker classification,union-management relations, wage and hour, discrimination and other labor and employment laws, procurement, conflict of interest, discrimination management, privacy and data security, internal investigation and discipline and other workforce and internal controls policies, procedures and actions. 
Widely published on worker classification and other workforce risk management and compliance concerns, the immediate past-Chair of the American Bar Association (ABA) RPTE Employee Benefits & Other Compensation Committee and current Co-Chair of its Welfare Plan Committee, Vice Chair of the ABA TIPS Section Employee Benefits Committee,  a Council Representative of the ABA Joint Committee on Employee Benefits, Government Affairs Committee Legislative Chair for the Dallas Human Resources Management Association, and past Chair of the ABA Health Law Section Managed Care & Insurance Interest Group, Ms. Stamer works, publishes and speaks extensively on management, worker classification, re-engineering, investigations, human resources and workforce, employee benefits, compensation, internal controls and risk management, federal sentencing guideline and other enforcement resolution actions, and related matters.  She also is recognized for her publications, industry leadership, workshops and presentations on these and other human resources concerns and regularly speaks and conducts training on these matters.Her insights on these and other matters appear in the Bureau of National Affairs, Spencer Publications, the Wall Street Journal, the Dallas Business Journal, the Houston Business Journal, and many other national and local publications. For additional information about Ms. Stamer and her experience or to access other publications by Ms. Stamer see here or contact Ms. Stamer directly.

Other Resources

If you found this update of interest, you also may be interested in reviewing some of the other updates and publications authored by Ms. Stamer available including:

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©2011 Cynthia Marcotte Stamer, P.C.  Non-exclusive license to republish granted to Solutions Law Press. All other rights reserved.

 

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