by David D. Green, Frank C. Morris, Jr., Allen B. Roberts
Two recent decisions on arbitration, one from the National Labor Relations Board (“NLRB” or “Board”) and one from the Supreme Court of the United States, present an interesting question: Can employers limit employees from launching potentially costly class actions? Some employers have applicants or new employees sign a separate agreement, or include a clause in application forms or in the employee handbook (which employees acknowledge), requiring employees to bring future disputes to arbitration and to agree that the arbitration will be individual only – not a class or collective action. These companies apparently hope that arbitration, and the avoidance of a jury trial, will be less costly than defending a court action if a dispute arises. They also hope to eliminate the attraction and risk of class and collective actions, which often are seen as providing undue leverage and a larger total payday to claimants and their attorneys.