Fifth Circuit Overrules Key Portion of recent NLRB Decision – Arbitration Agreements Containing Class Action Waivers Held Enforceable

In a highly anticipated decision, the Fifth Circuit Court of Appeals declined to enforce the key portion of the National Labor Relations Board’s (NLRB) decision in D.R. Horton, Inc.  In January 2012, the NLRB ruled that an arbitration agreement between an employer and an employee that required the employee to bring any claims against the employer in an arbitration proceeding (as opposed to a court-filed lawsuit), and which precluded the employee from asserting claims on a class or collective action basis, violated the employee’s right under Section 7 of the National Labor Relations Act (NLRA) to engage in protected concerted activity.  However, in its December 3, 2013 decision the Fifth Circuit ruled against the NLRB, holding that the NLRA does not confer on employees a substantive right to pursue claims on a class basis.