NLRB Weighs in Again on Mandatory Arbitration

In Dish Network, LLC, the National Labor Relations Board (NLRB) stated that a mandatory arbitration agreement violated the National Labor Relations Act (NLRA) where it required all employment disputes be subject to arbitration. Specifically, by making a generalization of all disputes, the agreement implicitly restricted employee access to the NLRB. The NLRB has historically identified these types of agreements as falling under Category 3 (prohibited) of the Boeing rules.

The NLRB also approved of language in the arbitration agreement that keeps arbitration proceedings, hearings, discovery, and awards confidential. However, it stated that requiring settlements of any arbitrated disputes to be confidential falls under Boeing Category 3. Specifically, settlements are separate from arbitration proceedings, and restricting settlement terms in this context could restrict NLRA rights to discuss employment terms and conditions or seek NLRA remedies from the NLRB. The NLRB indicated that a savings clause preserving NLRA rights could ameliorate this issue. Also, there is nothing that would prohibit parties in the settlement process itself to agree to confidentiality terms at that time.

Employers should continue to scrutinize their arbitration agreements to ensure compliance with federal and state laws. Similar to employee policies, including language that maintains NLRA rights can help avoid some of the pitfalls at issue in this ruling.

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