November 28, 2016 Top Story

Class Action Waivers Survive NLRB's Repeat Challenge

Court continues trend on waiver validity and widens circuit split

Kristen L. Burge

If at first you don't succeed, try, try again. Heeding this advice, the National Labor Relations Board challenged for a third time the validity of class action waivers in mandatory employment arbitration contracts. The U.S. Court of Appeals for the Fifth Circuit refused to overturn its two prior decisions holding such waivers valid and enforceable under the National Labor Relations Act (NLRA) and the Federal Arbitration Act (FAA). Citi Trends, Inc. v. NLRB highlights the circuit split over the validity of such waivers, and increases the likelihood that the Supreme Court will seek to resolve the conflicting decisions, according to certain ABA Section of Litigation leaders.

The Fifth Circuit Holds Trend on Waiver Validity 

In Citi Trends, a former employee filed an unfair labor practices charge over a class action waiver in the company's mandatory arbitration agreement. The employee argued requiring employees to waive employee class and collective actions violated Section 8(a)(1) of the NLRA.

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