NLRB Judge Invalidates Dealer Arbitration Agreement

On October 23, a National Labor Relations Board (NLRB) Administrative Law Judge invalidated a dealership’s arbitration agreement, ruling that it violated the National Labor Relations Act (NLRA) by requiring employees to resolve employment-related disputes exclusively through arbitration proceedings. Judge Eleanor Laws determined the dealership acted unlawfully in restricting employees’ rights under the NLRA.

The ruling stated that mandatory arbitration agreements that contain singular language such as “myself” and “I,” coupled with a provision that all communications connected to the arbitration are privileged, mislead employees to believe that only individual (as opposed to class) arbitration is allowed and that any claim cannot be discussed with fellow workers. There was no class action waiver in the arbitration agreement at issue.

The ruling was consistent with the NLRB’s 2012 D.R. Horton ruling (where it concluded federal law does not permit an employer to require waiver of the right to bring class or collective claims to address wages, hours or other working conditions in any arbitral or judicial forum).

FAA Concord H, Inc. dba Concord Honda and Machinists Automotive Trades District Lodge No. 190, Automotive Machinists Lodge No. 1173, Case Nos. 32-CA-066979, 070343, 072231