The U.S. Supreme Court held recently that consumer contracts may include provisions that require a consumer to waive the right to file a class action against the seller of the good or service. AT&T Mobility v. Concepcion (2011) 131 S.Ct. 1740. The decision was based on an interpretation of the Federal Arbitration Act. Generally, federal statutes pre-empt conflicting state law.
The Concepcion decision did not address employee rights to sue an employer as a class. The National Labor Relations Board interprets the administrative provisions of the National Labor Relations Act. Among other matters, the N.L.R.A. gives employees the right to engage in “concerted action” to address workplace issues with their employers. Surprisingly, the right of “concerted action” extends to both currently unionized and non-union employees.
The case now before the NLRB is D.R. Horton, NLRB No. 12-CA-25764. Briefing has been completed, and a decision is due soon. The case involves an overtime claim by employees who signed class action waivers in their arbitration agreements. The employees claim the waivers are unenforceable because they unduly restrict their rights to engage in “concerted activity” under the NLRA. Most employees in the private section (non-union) would also be protected if the decision is for the employees in Horton.