Arbitration Agreements for Employees in California
Typically, arbitration agreements are given to employees to sign when they are hired. These agreements usually state that both parties, employee and employer, agree to resolve their issues out of court should legal issues arise. Often time an arbitration agreement can require that this process take place in a specific jurisdiction/ particular geographic area and can also redefine or restrict some statutory issues.
However, there has been much debate over if these statutory restrictions are legal in California. One provision some companies have tried to include in their arbitration agreements was to take away the right for employees to be able to file a class action for any employment issues that might affect them and all of their similarly situated colleagues. This waiver is also commonly referred to as a class action waiver.
A recent ruling by The National Labor Relations Board (NLRB), In D.R. Horton, Inc. and Michael Cuda, concluded that as a condition of employment employers cannot require that employees sign arbitration agreements that give up their right to file a class action in any forum.
The NLRB did not apply the United States' Supreme Court's holding in AT&T Mobility v. Concepcion. This case had previously set president that class action waivers could be included in consumer arbitration agreements then to workplace arbitration agreements.
The NLRB held that: "employers may not compel employees to waive their [National Labor Relations Act (NLRA)] right to collectively pursue litigation of employment claims in all forums, arbital and judicial." The NLRB also stated that "[s]o long as the employer leaves open a judicial forum for class and collective claims, employee's NLRA rights are preserved without requiring the availability of classwide arbitration." Therefore, "[e]mployers remain free to insist that arbitral proceedings be conducted on an individual basis.”
Because this topic is being contested by both employees and employers it’s important to seek legal advice from an experienced California class action attorney. Labor law is complex and if you have any questions regarding your employment it is recommended that you contact a California labor law attorney who can help you understand your rights and in many cases will review your situation without charge.
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