The Building Tradesman Newspaper

Friday, September 06, 2019

NLRB seals the deal: Employers can fire workers who don't agree to arbitration

By Marty Mulcahy, Editor

WASHINGTON, D.C. - Well, now it's official.

1. The National Labor Relations Act does not prohibit employers from informing employees that if they fail or refuse to sign a mandatory arbitration agreement, it could result in their discharge.

2. The same federal law does not prohibit employers from imposing mandatory arbitration agreements in response to employees taking up collective action under the Fair Labor Standards Act or under state wage-and-hour laws.

It's another win-win for employers in a legal and political climate that's almost always lose-lose these days for workers who don't toil under a collective bargaining agreement.

The 2-1 Republican majority on the National Labor Relations Board handed down those rulings on Aug. 14, casting in-place a real-world decision issued last year by the similarly conservative U.S. Supreme Court. 

The NLRB's decision was the first case that followed the U.S. Supreme Court's 2018  Epic Systems vs. Lewis decision. That case arose out of a decision involving Epic made by the formerly majority-Democrat NLRB, which found that employer-mandated arbitration agreements requiring that employees waive the right to engage in class or collective litigation are unenforceable, because the National Labor Relations Act protects an employee’s right to engage in protected collective, or unionized activity. 

Not so fast, said a ruling made last year by a 4-3 majority of the Supreme Court. The message that their ruling sent to workers, is that under nearly all circumstances, mandatory arbitration, not the courts, is the first option for employers to resolve collective workplace disputes - and if workers don't like it, tough.

"As a result of the Epic Systems decision," writes attorney Daniel B. Pasternak of Squire Patton Boggs for the National Law Review, "employers are unlikely to see an abundance of future NLRB litigation involving mandatory arbitration agreements.  Indeed, since Epic Systems, the Board has been routinely dismissing charges and complaints involving mandatory arbitration provisions that require employees to waive class and collection action rights.  However, one case that had been filed with the Board prior to the Supreme Court’s Epic Systems decision presented a slight twist on the issue."

That "slight twist" was addressed by the NLRB in its Aug. 14 decision. The case was brought by  Cordúa Restaurants, Inc., and the decision was rendered by the NLRB on August 14, 2019. In the case, a group of employees filed a grievance against the employer for alleged violations of federal and state wage laws. The employer maintained, and the NLRB agreed, that the bosses can impose mandatory arbitration on employees even after the grievance was filed by the employees.

"After the suit was filed, the employer required its employees to sign an updated arbitration agreement, which prohibited employees not only from filing collective actions but also from opting in to collective action suits," writes Thomas C. Payne of the law firm of Barnes and Thornburg. "The NLRB said that because Epic Systems made mandatory arbitration agreements lawful, the revised arbitration agreement was lawfully implemented.

"The Board reiterated that past precedent still prohibits employers from terminating or disciplining employees for filing a class or collective action or engaging in any other conduct deemed to be “protected concerted activity,” but the requirement that employees agree to arbitrate their disputes instead of opting into a collective action – and face termination if they do not sign that agreement – is lawful under Epic Systems."

Frequently, one of the terms of forced workplace arbitration is imposing secrecy on the results of the proceedings.

“Five justices on the Supreme Court decided that it is acceptable for working people to have our legal rights taken away by corporations in order to keep our jobs,” AFL-CIO President Richard Trumka said last year when the court issued its ruling. SEIU International President Mary Kay Henry agreed that the justices “made it more difficult, if not impossible, for working people to use our legal system to fight against unlawful employer policies.”
“I see this as the general counsel doing real damage to the NLRA’s power and workers’ ability to get relief under the act,” said Celine McNicholas, director of government affairs and labor counsel at the left-leaning Economic Policy Institute.