Nov. 8 2012

NLRB Rules That Opt Out Right Does Not Save Arbitration Agreement with Class Waiver

Topics: Arbitration Agreements

Ealier this year, we posted about a complaint filed by the NLRB against 24 Hour Fitness, alleging that the company's arbitration policy (including a class waiver) violated the NLRA.  This week, an NLRB administrative law judge ruled that the 24 Hour Fitness policy indeed violates the NLRA, following the NLRB's earlier (and oft-criticized) decision in D.R. Horton.  In the case of 24 Hour Fitness, the factual twist is that the arbitration policy and agreement expressly allows employees to opt out of the agreement to arbitrate.  24 Hour Fitness argued that this opt out right distinguished the case from D.R. Horton because arbitration was not a condition of employment (since employees could opt out if they wanted to preserve their right to engage in concerted, collective action).  The ALJ disagreed and found that the policy, even with the opt-out right, violated the NLRA.  The ALJ found the opt out right to be an "illusion" and a right easily overlooked or unconsciously forfeited by employees, thus still abridging the right to engage in collective action.  The decision is available on the NLRB website here

While it seems clear that the NLRB's focus and attack on employer arbitration agreements will continue unless and until overruled, employers are reminded that the NLRB's initial decision in this area, D.R. Horton, is still on appeal and pending decision by the Fifth Circuit Court of Appeal.  Stay tuned. 

About CDF

For over 20 years, CDF has distinguished itself as one of the top employment, labor and immigration firms in California, representing employers in single-plaintiff and class action lawsuits and advising employers on related legal compliance and risk avoidance. We cover the state, with five locations from Sacramento to San Diego.

> visit primary site

About the Editor

Robin Largent represents employers, including major food and retail companies, in all types of employment litigation: wrongful termination, retaliation, breach of contract, wage and hour (California Labor Code) and unfair competition. She also regularly counsels and advises California employers on issues of compliance with California and federal employment laws.
> Contact   > Full Bio   Call 916.361.0991

Carothers DiSante & Freudenberger LLP © 2018

About CDFWhat We DoContact UsAttorney AdvertisingDisclaimer