NLRB Continues To Oppose Arbitration Policies That "Chill" Employee Class Actions

The General Counsel for the National Labor Relations Board ("Board") issued a complaint yesterday alleging that 24 Hour Fitness USA, Inc., violated the National Labor Relations Act ("NLRA") by insisting that all employment-related disputes be resolved through individual arbitration. The employer, which operates fitness centers nationwide, requires its non-union workforce, as a precondition of hire, to sign written waivers surrendering any right to pursue collective or class action lawsuits or arbitrations against the Company. Employees may later opt-out of this waiver, but only by submitting a Company-created form within 30 days of their signing the original release.

According to the Board, this "one time only" limited opt-out provision is insufficient to circumvent the Board's prior ruling in D.R. Horton, Inc., 357 N.L.R.B. No. 184 (January 3, 2012)  that a mandatory arbitration agreement that prohibits employees from filing or participating in joint, class, or collective employment-related claims in any arbitral or judicial forum violates NLRA Section 8(a)(1). The Board considers 24 Hour Fitness’ process as illegally coercive because employees would be understandably reluctant at and within 30 days of hire to alert their new employer of their interest in one day filing or participating in a class action lawsuit or arbitration against the employer.

Scheduled before an Administrative Law Judge is a June 11, 2012 hearing that seeks an order prohibiting the employer from maintaining and enforcing that portion of the policy that "gives up" collective and class action participation and relief .

 

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