Mandatory Arbitration Policy Created in Response to Collective Action is Lawful, Says NLRB.
The National Labor Relations Board held that an employer’s promulgation of a mandatory arbitration provision in response to employee protected concerted activity does not violate the National Labor Relations Act (NLRA).
In Tarlton and Son, three employees jointly filed a wage-and-hour suit in state court against the Employer. Weeks later, the Company implemented the mandatory arbitration policy. The policy required that employees, in the future, submit most legal claims arising from their employment to binding arbitration. The Board acknowledged that the employees’ lawsuit constituted protected concerted activity. But as the Board held in Cordua Restaurants (which we wrote about here), the Supreme Court’s Epic Systems decision establishes that requiring employees to resolve employment claims through individualized arbitration rather than through collective action does not violate an employee’s Section 7 rights under the NLRA. Thus, the promulgation of the arbitration policy did not violate Section 8(a)(1) of the NLRA.