July 18, 2012 Articles

D.R. Horton and Class-Waiver Arbitration Provisions

The NLRB has strongly asserted itself in the fight over class-action waivers in employer-mandated arbitration agreements.

By Hillary Benham-Baker

Over the past several years, employers have increasingly required employees to execute class-action waivers, typically as a component of employer-mandated arbitration agreements. This tactic is used by employers as a means of avoiding class liability altogether. As the frequency of such waivers increased, so too did the amount of litigation regarding the enforceability of class waivers. The U.S. Supreme Court issued a ruling last year that held, inter alia, that based on Federal Arbitration Act (FAA) preemption of state law, class waivers were enforceable. AT&T Mobility LLC v. Concepcion, 131 S. Ct. 1740 (2011). Concepcion was decided in the consumer context, but many courts have relied on it to enforce class waivers in the employment context and compel employment class-action plaintiffs to individual arbitration, citing this precedent. The landscape shifted yet again in early 2012, however, when the National Labor Relations Board (NLRB) found that class-action waivers in the employment context violated the National Labor Relations Act (NLRA) in D.R. Horton Inc., 357 N.L.R.B. No. 184, 2012 WL 36274 (Jan. 3, 2012).

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