As noted on an earlier post, the United States Supreme Court has held that arbitration agreements that contain class action waivers are generally enforceable. This was the holding in a case called Concepcion. That case specifically held that such agreements were enforceable under the Federal Arbitration Act.
Subsequent to Concepcion, the National Labor Relation Board handed down a decision in a case called D.R. Horton. This decision held that such waivers in FLSA collective actions were not enforceable because they violated the National Labor Relation Act prohibition against agreements that banned “concerted activity.”
D.R. Hornton was an exciting moment for employee rights advocates. It was a glimmer of hope in an otherwise sea of bad news. D.R. Hornton was appealed to the Fifth Circuit. This was an important strategic decision that the employer made. The employer could have either appealed the decision to the Fifth Circuit or the D.C. Circuit. Because the Fifth Circuit has jurisdiction over the case but not the agency, any decision of the Fifth Circuit would be binding in that Circuit but not on the NLRB.
Oral arguments in D.R. Hornton were held on February 5, 2013. Subsequent to the Board’s ruling, however, courts have not been receptive to D.R. Hornton. In fact, 27 courts have rejected D.R. Hornton, while only two have followed it. Interestingly, the two that have followed it have been a couple of the more recent decisions. One was out of the Eastern District of Missouri.
That sets up a situation where the agency with jurisdiction over labor agreements has said that agreements are not enforceable, while courts around the country have said that they are. If that did not create enough confusion, the D.C. Circuit handed down a case called Noel Canning v. NLRB. In this case, the D.C. Circuit held that the President’s recess appointments to the NLRB were not valid because Congress was not in recess. As if this was not confusing enough, three circuits have rejected the Noel Canning case. Moreover, because of when the D.R. Hornton decision came out, there is some question about whether Canning applies to D.R. Hornton. Some read the Canning decision to only apply to appointments within a limited time period. Others read the Canning decision to go back to prior appointments, which would capture the D.R. Hornton decision.
What does all this mean? I have no earthly idea. Fortunately, I do not wear a black robe. Unfortunately for myself and my clients, the law is in a great state of confusion in this area. Stay tuned.