Almost a year ago, the U.S. Supreme Court decided AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011), regarding the enforceability of arbitration agreements with provisions that waive employees’ rights to assert their claims as class actions. In Concepcion, the Court held that the Federal Arbitration Act (FAA) preempted a state-law rule that prohibited, as unconscionable, the enforcement of such “class action waiver” provisions in arbitration agreements because the state rule impermissibly interfered with accomplishing the FAA’s objectives.
Concepcion arose in the context of a consumer’s challenge to a sales tax charge on a cell phone that had been advertised as “free,” and the case did not address how the FAA might apply to class action waiver provisions in arbitration agreements covering employment disputes. After Concepcion, the National Labor Relations Board (NLRB) in D.R. Horton Inc., 2012 WL 36274 (N.L.R.B. Jan. 3, 2012), invalidated an agreement that required all employees individually to arbitrate employment claims as contrary to §§7 and 8 of the National Labor Relations Act (NLRA). The NLRB found that the waiver violated §7 because it restricted group association by prohibiting employees from bringing collective or class claims in any forum. The NLRB found Concepcion inapplicable because it did not address the NLRA or employment disputes.
