8th Circuit sides against employees, NLRB on mandatory arbitration

By Alison Frankel, Thomson Reuters & News Insight

For employees, the National Labor Relations Board’s decision last year in the D.R. Horton case has turned out to be a hollow promise indeed. The NLRB, in what was widely regarded as a response to the U.S. Supreme Court’s most recent endorsement of mandatory arbitration clauses in AT&T Mobility v. Concepcion, said that employers cannot compel employees to waive their right to collective action under the National Labor Relations Act through private arbitration clauses. We’ve already told you that most of the federal district judges who have had to weigh D.R. Horton against Supreme Court precedent have disregarded the NLRB’s reasoning and concluded that employers can bar class actions via arbitration clauses. On Monday, a three-judge panel of the 8th Circuit Court of Appeals delivered the first federal appellate assessment of D.R. Horton — and the news is not good for opponents of mandatory arbitration.

In Owen v. Bristol Care, Judges Lavenski Smith, Arlen Beam and Raymond Gruender were utterly dismissive of the NLRB’s decision, overturning one of the few U.S. district judges to have held that Horton prohibits employers from enforcing arbitration agreements that bar classwide actions. (I should note here that the NLRB’s Horton decision is itself on appeal at the 5th Circuit.) The 8th Circuit held that the NLRB ruling addressed only situations in which employees were required to sign away all of their collective rights; by contrast, Bristol Care’s mandatory arbitration agreement, according to the appeals court, did not waive employees’ right to file complaints with the Equal Employment Opportunity Commission or other state and federal employment administrators, which could then sue on behalf of more than one employee.


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