5th Cir. Hears Class Action Waiver Ban Arguments

On Tuesday, the National Labor Relations Board (“NLRB”) appeared before the Fifth Circuit to defend its ruling in In re D.R. Horton, Inc., 357 NLRB No. 184, 2012, WL 36274 (Jan. 3, 2012), which partly excludes employment agreements from the reach of the Federal Arbitration Act (“FAA”) and U.S. Supreme Court’s ruling in AT&T Mobility LLC v. Concepcion, 563 U.S. ___ (2011) .

As I wrote last year in NLRB Finds Class Action Litigation Protected Activity Under NLRA, the D.R. Horton states that employers may not require employees to waive the right to resolve employment-related disputes on a class-wide basis.

However, few district courts have elected to adopt the reasoning espoused by the NLRB in D.R. Horton. One of those cases, Owen v. Bristol Care, Inc., No. 11–04258–CV–FJG, 2012 WL 1192005 (W.D. Mo.Feb. 28, 2012), was recently overturned by the Eighth Circuit, the first appellate court to address the impact of D.R. Horton, in Owen v. Bristol Care, Inc., — F.3d —, 2013 WL 57874 (8th Cir. 2012).

Before the Fifth Circuit, the NLRB argued that the NLRB (and Courts) have long recognized the right of employees to proceed on a collective basis, that Section 7 of the NLRA reflects a Congressional mandate creating such a right and that the courts should not be in a position to dictate to employees how they exercise their Section 7 rights.

Attorneys for D.R. Horton argued that no such rights exists and that the Fifth Circuit should follow the 26 other courts that have found the D.R. Horton ruling unpersuasive.

Abbey Spanier, LLP, located in New York City, is a well-recognized national class action and complex litigation law firm.