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U-Haul arbitration case - its implications
June 19, 2006 by Ross Runkel at LawMemo

The NLRB held it was an unfair labor practice for a non-union employer to adopt a mandatory arbitration provision that covered "any other legal or equitable claims and causes of action recognized by local, state, or federal law or regulations."

Reason: because it would reasonably tend to inhibit employees from filing charges with the National Labor Relations Board. U-Haul Co of California (NLRB 06/08/2006) (2-1).

See discussion at Arbitration clause was unfair labor practice and NLRB takes aim at arbitration clause.

Now what?

Three things come to mind.

1. NLRB unfair labor practices

Expect unions to file a lot of unfair labor practice charges against non-union employers that have arbitration programs. Don't expect the NLRB to do anything unless the arbitration plan has language, such as that quoted above, that employees would reasonably read as cutting off their ability to file NLRB charges. Do expect employers that have such language to take immediate steps to change the language in their existing arbitration policies.

2. EEOC

It is possible that the U-Haul decision will encourage the EEOC to resume its attacks against mandatory arbitration agreements. See Policy Statement on Mandatory Binding Arbitration of Employment Discrimination Disputes as a Condition of Employment. It is not obvious to me how the EEOC can succeed in this.

3. Arbitration generally

It's important to point out that the U-Haul decision will not have any effect on the remainder of U-Haul's arbitration policy. The case does not mean U-Haul will be unable to enforce its arbitration policy as to all claims other than NLRB charges.

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