An arbitration agreement requiring that all “claims or controversies in any way relating to or associated with … employment or the termination of … employment … will be resolved exclusively by binding arbitration,” including “all statutory… claims” violated the National Labor Relations Act (NLRA), the National Labor Relations Board (NLRB) has ruled.

The Board, applying Boeing Co., 365 NLRB No. 154 (2017), found that the agreement made arbitration the exclusive forum for the resolution of statutory claims under the NLRA, which violates the NLRA. Cedars-Sinai Medical Center, 368 NLRB No. 83 (Sept. 30, 2019). The Board categorized the agreement as a Category 3 policy under Boeing. (For more on Boeing and its category approach to employer rules, see our articles Labor Board Sets New Standard for Determining Lawfulness of Facially Neutral Workplace Rules and Labor Board Clarifies Boeing Work Rules Decision, Finds Confidentiality, Media Contact Rules Lawful).

The Board rejected the employer’s defense that the agreement’s “savings clause,” which provided that the agreement “does not apply to . . . claims . . . that are preempted by federal labor laws,” was sufficient to communicate to employees that claims under the NLRA were not covered. Citing Prime Healthcare Paradise Valley, LLC, 368 NLRB No. 10 (2019), where the Board also held an arbitration agreement unlawfully prohibited the filing of claims with the NLRB, the Board noted that:

[v] ague savings clauses that would require employees to “meticulously determine the state of the law” themselves are likely to interfere with the exercise of NLRA rights. Such clauses include, for example, those stating that “nothing in this agreement shall be construed to require any claim to be arbitrated if an agreement to arbitrate such claim is prohibited by law,” that exclusively require arbitration limits that requirement to circumstances where a claim “may lawfully be resolved by arbitration.”

The Board held that the phrase “preempted by federal labor laws” was vague and that an “objectively reasonable employee … reading this vague language would not divine an implicit intent to exclude claims arising under the Act.”

The Board contrasted that savings clause with the one in the arbitration agreement under review in Briad Wenco, 368 NLRB No. 72 (2019). The savings clause there stated: “Nothing in this Agreement shall be construed to prohibit any current or former employee from filing any charge or complaint or participating in any investigation or proceeding conducted by an administrative agency, including but not limited to … the National Labor Relations Board ….”

In addition to its determinations regarding the lawfulness of the arbitration agreement, the Board also held that the company’s action for declaratory judgment in state court did not violate the NLRA. In light of the U.S. Supreme Court’s decision in Epic Systems, 138 S.Ct. 1612 (2018), the Board held that the company could lawfully seek to compel individual, rather than class, arbitration through a complaint in state court.

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Employers should evaluate whether their arbitration agreements clearly inform employees of their right to file charges with the NLRB. Employers should not rely on a vague savings clause to communicate to employees that employees still can file unfair labor practice charges at the NLRB.

Please contact a Jackson Lewis attorney for questions about this case, the NLRB, or assistance in implementing or reviewing an employee dispute resolution program.

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Philip B. Rosen Philip B. Rosen

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing…

Philip B. Rosen is a Principal in the New York City office of Jackson Lewis P.C. and a member of the Firm’s Management Committee. Mr. Rosen also leads the firm’s Labor Practice Group. He joined the Firm in 1979 and served as Managing Partner of the New York City office from 1989 to 2009.

Mr. Rosen lectures extensively, conducts management training, and advises clients with respect to legislative and regulatory initiatives, corporate strategies, business ethics, social media, reorganizations and reductions-in-force, purchase/sale transactions, sexual harassment and other workplace conduct rules, compliance with the Americans With Disabilities Act, wrongful discharge and other workplace litigation, corporate campaigns and union organizing matters, collective bargaining, arbitration and National Labor Relations Board proceedings. He has been quoted by the press on many labor matters, including the National Labor Relations Board’s recent initiatives on protected concerted activity and the proposed Notice Posting requirements.