NLRB's Recent Decision on Employer-Mandated Arbitration

Amex Card Servs. Co. - The Decision


For over a decade, Amex Card Services Company ("Amex") had a history of requiring its employees to enter into an arbitration agreement as a condition of their employment. Said policy expressly waived all rights to trial regarding employment-related disputes. Written acceptance was required to be submitted via a "New Hire Employment Arbitration Policy Acknowledgement Form" (the "Form") before an employee could begin working for the company. Employment-related disputes arising under the National Labor Relations Act (NLRA) were expressly excluded from the policy, but this fact was not disclosed to all employees, for it was not noted on the Form nor was the arbitration policy incorporated therein.

Three former employees challenged the lawfulness of the arbitration policy and, on November 10, 2015, the National Labor Relations Board (NLRB) decided that Amex's enforcement and maintenance of the policy violated Section 8(a)(1) of the NLRA. Amex Card Servs. Co., 363 NLRB No. 40 (Nov. 10, 2015). The NLRB based its decision on precedent interpreting violations of Section 8(a)(1) of the NLRA to include the following:

1) Employer policies and practices requiring an employee's agreement to refrain from filing joint, class, or collective claims addressing employment conditions against the employer; and

2) Employers maintenance of policies that employees would reasonably believe interfere with their ability to file a charge with the NLRB or access NLRB processes.

The NLRB found that Amex's use of the policy and presentation of it in a "take it or leave it" fashion as a condition of the employee's employment was unlawful. Further, without the inclusion of the policy in the Form, it was reasonable for employees to believe their agreement to the policy would foreclose all opportunity to seek redress from the NLRB. Therefore, the policy was unlawful and Amex's enforcement of it violated the NLRA.

Application to Your Business

A common misconception in regards to the NLRA is its applicability to an employer. As illustrated with Amex, the NLRB may exercise jurisdiction over all private sector employers engaged in interstate commerce with an annual volume of business over a threshold dollar amount. The NLRB provides a comprehensive summary of its jurisdictional authority that can be accessed here. This covers a wide-range of employers and may halt many policies established to minimize litigation prospects. Consider whether your business has a mandatory arbitration or other alternative dispute resolution clause and whether you are in compliance with this decision. Additional review may be needed, but chances are if your ADR is mandatory, it could be in violation of Section 8(a)(1) of NLRA.

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