A Surprising Win for Employers: ALRB Upholds Use of Class Action Waivers in Arbitration Agreements

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07/24/2017

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A Surprising Win for Employers: ALRB Upholds Use of Class Action Waivers in Arbitration Agreements

 By: Anthony Oceguera

On November 18, 2016, California’s Agricultural Labor Relations Board (“ALRB”) issued a decision in T.T. Miyasaka, Inc., Case No. 2016-CE-011-SAL, upholding a class action waiver in an employer’s arbitration policy and agreement.  In the case at issue, the employer required that – as a condition of employment – employees agree to arbitrate their employment-related disputes with the employer only on an individual basis.  In challenging the class action waiver, the employee argued that such waivers violated an employee’s right to engage in concerted activity under California’s Agricultural Labor Relations Act (“ALRA”). 

The ALRB emphatically rejected the employee’s argument.  In doing so, the ALRB declined to follow the National Labor Relations Board’s (“NLRB”) decision in D.R. Horton, which the NLRB and some federal circuits (including the Ninth Circuit) have relied upon to invalidate class action waivers.  The D.R. Horton decision held that class waivers violate the National Labor Relations Act (“NLRA”) by unlawfully restricting an employees’ right to engage in concerted action. 

Rather than extend that decision to the ALRA, the ALRB instead properly followed California precedent, citing to the California Supreme Court’s 2014 decision in Iskanian v. CLS Transportation Los Angeles, LLC, which upheld the use of class action waivers in arbitration agreements.  The ALRB noted that the California Supreme Court directly addressed the NLRB’s D.R. Horton decision and rejected the argument that class action waivers were unlawful under the NLRA.  Therefore, the ALRB concluded that the Iskanian decision was controlling authority in California, compelling a California state agency like the ALRB to rule that class action waivers do not violate the ALRA.

COUNSEL TO MANAGEMENT:

The attacks on arbitration agreements, and specifically on class action waivers, are likely to continue for the foreseeable future and ultimately will likely require a decision by the United States Supreme Court to resolve numerous conflicting rulings throughout the country.  For now, agricultural employers in California should be encouraged by the ALRB’s decision in their favor.  Employers who have questions regarding their arbitration agreements, or who find themselves facing Unfair Labor Practice charges challenging their class action waivers, are encouraged to contact the experts at The Saqui Law Group. 

 

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