Published on:

NLRB Continues to Attack Mandatory Arbitration Agreements for Unionized Employees

The National Labor Relations Board (NLRB) is the government agency responsible for investigating and remedying unfair labor practices. Lately, employees complaining of unlawful arbitration agreements have been filing complaints with the NLRB. The NLRB has consistently ruled in favor of the employees, but on appeal, federal courts have just as consistently overturned the NLRB’s ruling and allowed arbitration agreements to stand.

Corporations have increasingly been including arbitration agreements in their employee contracts in order to force any dispute with employees into arbitration. Many employees aren’t aware they’re signing away their right to take their employer to court in the event of a dispute, and even those who are aware of what’s at stake are afraid of losing their job if they don’t sign.

Arbitration agreements require all disputes between the parties to be handled via arbitration. This is extremely advantageous to the employer because arbitration is not equipped to handle class actions or collective actions, which means each complaint must be handled individually. Because each employee’s individual claims are usually less than $1,000, filing a claim for one employee’s claims would cost more than the employee would potentially receive in the end.

Class actions allow employees to combine their claims into one lawsuit. The total of their combined claims is usually more than enough to justify filing a lawsuit, and it provides the plaintiffs with the leverage they need to effectively litigate against a large corporation with a team of lawyers at its disposal.

Because they are private companies, and not government courts, arbitration is known for being biased. There are certain arbitration companies that have a reputation of being fair and unbiased, but the employer is not always motivated to use those arbitration companies. When the employer pays for the arbitration (as they often do), it can make it more likely that the arbitrator will rule in favor of the employer, even if the arbitrator is not consciously aware of the bias.

Because arbitration has the potential to be so unfair to employees, the NLRB continues to insist that arbitration agreements violate the National Labor Relations Act (NLRA). According to the NLRB, class action lawsuits are protected under the act, which means anything that prevents employees from filing a class action lawsuit (such as an arbitration agreement) is therefore in violation of the NLRA.

The NLRB maintained this stance in a recent ruling against Murphy Oil, in with the gas station chain was allegedly making it a condition of employment for its workers to sign an arbitration agreement. Murphy Oil appealed the NLRB’s decision and the case went to the Fifth Circuit Court, which reversed the NLRB’s ruling.

The Second and Eighth Circuit Courts are just two federal courts that have also overturned similar rulings by the NLRB against arbitration agreements. A ruling by the Supreme Court, one way or the other, would settle the matter for good. The NLRB noted in their decision that there is currently no precedent set by the Supreme Court in employee arbitration agreements, although the Supreme Court has previously ruled to allow companies to ban class actions in the contracts their customers sign. Whether the Supreme Court will continue to favor companies when it’s the contracts with their employees that are at stake has yet to be seen.

If companies continue to appeal the rulings made by the NLRB, 2016 might be the year we see the Supreme Court make a final decision in the matter.

The Chicago class action lawyers at the Chicago Overtime Law Center are investigating unpaid overtime claims by waiters and bus boys and other restaurant and hotel workers against national restaurant chains including Hilton, W, Marriott, Sheraton, Disney, Holiday Inn, Best Western, HomeTown Buffet, Old Country Buffet, Applebees, Chipotle, Red Lobster, Olive Garden, Cracker Barrel, Outback Steak House, Taco Bell, Burger King, Texas Roadhouse, Logan’s, Wendy’s and hotels for mis-classifying employees as managers or assistant managers, forcing employees to work off the clock at business, failing to share all tips, erasing or altering time sheets or time records, pressuring workers not to report or record overtime, and otherwise failing to pay workers for overtime and other wages. If you are the victim these wage theft practices call us at (312) 869-4095 or contact us online.

The Chicago class action attorneys at the Chicago Overtime Law Center have three decades of experience fighting to help employees who are victims of wage, overtime and tip theft by their employers. We have a team of Chicago unpaid overtime lawyers who concentrate on prosecuting state and nationwide class action lawsuits. Our attorneys work out of Chicago and Oak Brook offices and pursue claims for workers all over the Chicago area including Oswego and Plano. We protect unpaid workers who haven’t received overtime throughout the Chicago area including in DuPage, Kendall, Lake, McHenry, Kane and Cook Counties.

Our Romeoville and Orland Park overtime lawyers are intimately familiar with the issues that arise during wage claim litigation, and we know the laws that govern overtime cases well. Many employers mis-classify employees as being exempt from overtime laws and pay workers salaries instead of hourly wages in order to avoid paying them overtime. Some employers mistakenly classify employees as exempt and others intentionally do so in order to circumvent the law. In either case, workers do not receive the wages they should, and a lawsuit may be the only way to recover their earned wages.

The Chicago Overtime Law Center is based in Chicago, and represents clients throughout the country who have unpaid overtime and other employment right claims.