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Employees can bring class-action disputes against employer

The National Labor Relations Board (NLRB) recently ruled that employers cannot prevent workers from filing class actions concerning work-related employment law disputes. This ruling would make null and void any arbitration agreement that specifically prohibits groups from joining together to file a claim. This ruling applies to union and non-union employees alike.

This ruling came about because of a nationwide home building company that requires all work related disputes to be arbitrated on an individual basis. This would have essentially prohibited any claim made on behalf of a class or as any part of a collective action for a group of employees. This is significant because such arbitration agreements are extremely common and used across the country.

It has been argued that a recent U.S. Supreme Court case should apply upholding arbitration agreements preventing consumers from banding together to bring certain class actions. However, that case has been distinguished from the current matter because a consumer driven action would not (like an employee driven action) involve the National Labor Relations Act of 1935. That act provided workers with the ability to unionize at participate in collective actions. The policy behind the act is the recognition that the rights of workers will go unrecognized if only allowed to be tried one at a time.

Employers have often characterized employees by other labels such as contractors or superintendants to deprive workers of employee rights under federal law such as overtime pay. The debate concerning this matter, however, is far from over and we can expect businesses to resist and to appeal such rulings.

Source:, "NLBR backs workers on joint arbitration claims," by Stephen Greenhouse, Jan. 9, 2012

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