Post-Epic Systems Ruling by NLRB Finds That Changes to Arbitration Agreement “in Response” to Lawsuit Did Not Violate the National Labor Relations Act

In a major decision issued by the U.S. Supreme Court last year, a closely divided Court ruled in Lewis v. Epic Systems that arbitration agreements containing a ban on class or collective actions did not violate the National Labor Relations Act (NLRA or Act). In a recent case citing the Court’s ruling, the National Labor Relations Board (NLRB or Board), the federal agency that enforces the NLRA, has ruled that revisions an employer made to an arbitration agreement “in response to” a lawsuit filed by a group of employees did not violate the NLRA.

In Cordua Restaurants, the employer revised its arbitration agreement to make clear that its employees were prohibited from joining a class or collective action, and conditioned continuing employment on their signed acceptance of the revised agreement. The revisions were made after a group of employees brought a collective action in federal court to recover unpaid wages.

In finding for the employer, the Board concluded that in light of Epic Systems, the revised arbitration agreement – even if issued in response to the employees’ lawsuit – did not violate the NLRA because it did not have “the effect” of restricting protected concerted activity.

Members of the Center for Workplace Compliance (CWC) can read more here.