Category: Alternative Dispute Resolution

Fifth Circuit Upholds Arbitration Agreement Prohibiting Class/Collective Actions and Cautions NLRB to Reconsider Board Policy

Last week, in Murphy Oil USA, Inc. v. NLRB, the United States Court of Appeals for the Fifth Circuit upheld an arbitration agreement requiring employees to arbitrate claims on an individual basis, thereby reaffirming its holding in D.R. Horton, Inc. v. NLRB, despite the National Labor Relations Board’s (“NLRB”) aggressive attempt to find arbitration agreements unlawful. The case is noteworthy because the court rebuffed the Board’s effort to circumvent D.R. Horton and cautioned the NLRB “to strike a more respectful balance between its views and those of circuit courts” that review them. One wonders whether the NLRB will change its current stance against arbitration agreements that prohibit class/collective actions. Regardless, the Fifth Circuit’s decision helps to settle the current state of the law at the circuit court level that arbitration agreements and class/collective action waivers are lawful under the National Labor Relations Act (“NLRA”).

Fifth Circuit Denies NLRB Petition to Rehear D.R. Horton

On April 16, 2014, the Fifth Circuit Court of Appeals denied the National Labor Relations Board’s (the “Board” or “NLRB”) petition for rehearing en banc in D.R. Horton, Inc. v. NLRB, thus upholding its December 3, 2013 decision that arbitration agreements prohibiting class or collective actions claims do not violate the National Labor Relations Act (“NLRA”).

D.R. Horton Reversed by 5th Circuit

On December 3, 2013, the Fifth Circuit Court of Appeals reversed the decision of the National Labor Relations Board (the “Board” or “NLRB”) in D.R. Horton, Inc. and held that D.R. Horton’s arbitration agreement prohibiting class or collective action claims did not violate the National Labor Relations Act (“NLRA”). In so holding, the court found that the Board did not give proper weight to the Federal Arbitration Act (“FAA”).

Agreements to Arbitrate Will Be Enforced Against Unit Owners Even Where the Claims of the Condominium Association Will Be Litigated

Purchasers of units in planned real estate developments, such as condominium complexes, often enter into purchase agreements with the developer that contain arbitration provisions requiring the purchasers to arbitrate any claims they may have arising out of the construction and sale of the unit. In Hudson Tea Buildings Condo Assoc. v Block 268 LLC, the New Jersey Appellate Division recently considered questions over the enforceability of such provisions in a lawsuit involving some claims that were subject to the arbitration provision and some that were not.

Southern District of New York Mandates Early Mediation in Employment Discrimination Cases

The U.S. District Court for the Southern District of New York (“SDNY”) recently issued a Notice to the Bar advising that effective January 3, 2011, all employment discrimination cases, except cases filed under the Fair Labor Standards Act, will be automatically referred for early mediation through the court’s Alternative Dispute Resolution program.