Fifth Circuit Rules (Again) That Arbitration Class Waiver Does Not Violate Federal Labor Law

The U.S. Court of Appeals for the Fifth Circuit has reaffirmed its prior holding in the case of D.R. Horton, once again rejecting the position taken by the National Labor Relations Board (NLRB) that an employment arbitration agreement containing a clause barring class-based claims restricts the right of employees to engage in protected concerted activity for their “mutual aid and protection,” in violation of the National Labor Relations Act (NLRA).

The recent decision by the appeals court in Murphy Oil USA, Inc. v. NLRB, No. 14-60800 (5th Cir. Oct. 26, 2015), reiterates the courts holding in the 2013 case of D.R. Horton, where it concluded that the NLRBs position was contrary to the Federal Arbitration Act (FAA) as interpreted by the U.S. Supreme Court.

Despite the Fifth Circuits ruling in Murphy Oil, a position which also has been adopted by the Second, Eighth, Ninth, and Eleventh Circuits, the NLRB remains defiant in adhering to its stance that arbitration class waivers violate federal labor law, and will continue to do so unless and until only the Supreme Court rules otherwise. Indeed, just days after the Fifth Circuit’s ruling in Murphy Oil, the Board once again invalidated an arbitration program containing a class waiver in another case.