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NLRB takes aim at arbitration clause
June 19, 2006 by Ross Runkel at LawMemo
Did you think the NLRB would hold that a mandatory arbitration policy adopted by a non-union employer violated the National Labor Relations Act?
That's what they did in U-Haul Company of California (NLRB 06/08/2006) (2-1).
Primary reasoning: "because the employees would reasonably construe the broad language to prohibit the filing of unfair labor practice charges with the Board."
The case is important because the Board held the arbitration policy on its face was an unfair labor practice, even though there was no proof that anybody had ever been deterred from utilizing the NLRB's processes.
The employer made agreement to an arbitration policy a condition of employment or continued employment. The policy states that it:
. . . applies to all ... employees, regardless of length of service or status and covers all disputes relating to or arising out of an employee’s employment with [the employer] or the termination of that employment. Examples of the type of disputes or claims covered by the [Arbitration Policy] include, but are not limited to, claims for wrongful termination of employment, breach of contract, fraud, employment discrimination, harassment or retaliation under the Americans With Disabilities Act, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964 and its amendment, the California Fair Employment and Housing Act or any other state or local anti-discrimination laws, tort claims, wage or overtime claims or other claims under the Labor Code, or any other legal or equitable claims and causes of action recognized by local, state or federal law or regulations. [Emphasis added.]
The NLRB put its focus on the bold language.
The majority said:
We recognize that the language in the arbitration policy does not explicitly restrict employees from resorting to the Board’s remedial procedures. However, the breadth of the policy language, referencing the policy’s applicability to causes of action recognized by “federal law or regulations,” would reasonably be read by employees to prohibit the filing of unfair labor practice charges with the Board. Plainly, the employees would reasonably construe the remedies for violations of the National Labor Relations Act as included among the legal claims recognized by Federal law that are covered by the policy. Thus, we find that the language of the policy is reasonably read to require employees to resort to the Respondent’s arbitration procedures instead of filing charges with the Board.
The decision was 2-1, with Member Wilma B. Liebman and Member Peter C. Schaumber in the majority, and Chairman Robert J. Battista dissenting.
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Editor: Ross Runkel, Professor of Law Emeritus. email Ross@LawMemo.Com, Phone 503-399-8028. Copyright LawMemo, Inc.
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