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    NLRB DETERMINES CLASS ACTION WAIVERS IN AGREEMENTS VOID


    As you are aware, many employers use arbitration clauses in agreements, both collective bargaining and employment agreements, as a way of avoiding what is thought to be more costly court litigation and further have had union and non-union employees agree to not join a class action lawsuit or class action arbitration over employment/related issues. The NLRB, however, has now ruled that the use of class action waivers in a case, involving misclassification of employees under the Fair Labor Standard Act overtime pay provision, violates the NLRA. Their opinion states that the Act protects employees' ability to join together to pursue workplace grievances, including litigation. The NLRB also distinguished a Supreme Court case which upheld such waivers in a case that did not involve rights protected by the NLRA. Therefore, it is likely that this decision will be appealed, and it is not, in our view, necessary for employers that have such provisions in their contracts to modify them or exclude them from future contracts. You, of course, should have a severability clause included.

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