Labor Board Backs Workers on Joint Arbitration Cases

January 6, 2012

Labor Board Backs Workers on Joint Arbitration Cases

By STEVEN GREENHOUSE

The National Labor Relations Board ruled on Friday that employers could not prevent workers from filing work-related group or class actions, essentially banning employment agreements at many companies that require workers to pursue all claims individually through arbitration.

In a decision that will no doubt anger many companies, the labor board concluded that a federal law protecting workers’ right to engage in concerted action trumps any arbitration agreement that bars them from bringing group claims. The ruling applies to nonmanagement private sector workers, union and nonunion, from low-wage restaurant workers to well-paid employees on Wall Street.

The ruling examined an agreement used by a nationwide homebuilding company, D. R. Horton, in which workers were required to waive their right to sue in court and instead bring all claims to an arbitrator on an individual basis. The agreement prohibited the arbitrator from consolidating claims, allowing a class or collective action or awarding relief to a group or class of employees.

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