Agreements requiring employees to submit employment disputes to arbitrators rather than courts are common in today’s workplaces but have faced legal challenge with inconsistent results. Employers, including those in New Jersey, regularly incorporate class and collective action waivers into such agreements, prohibiting employees who bring claims against their employers from pursuing such claims on a class or collective basis and instead providing for single-claimant arbitration hearings.
Although challenges asserted against the waivers have been grounded in various legal theories, the challenge gaining the most traction is based on the National Relations Labor Act (NLRA). Beginning in January 2012 and continuing through the present, the National Labor Relations Board (NLRB or “the board”) issued rulings striking down class and collective action waivers as violating the NLRA. There is a split in the circuit courts regarding this issue, and three recent petitions for review to the United States Supreme Court set the stage for a high-profile showdown.
‘D.R. Horton’
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