Monday, April 30, 2012

NLRB Fires Another Shot at Individual Arbitration Mandates

The National Labor Relations Board today issued a complaint alleging that 24 Hour Fitness USA, Inc. violated federal labor law by insisting that all employment-related disputes be resolved by individual arbitration.  The California-based company, which operates fitness centers across the country, requires employees to agree in writing, as a condition of employment, to forego any rights to collective or class action lawsuits or arbitrations. According to the NLRB, such a requirement is unlawful.

For at least the past two years, the company has enforced its no-class-action policy by asserting it in litigation brought by employees in numerous cases, several of which are cited in the complaint.  In each case, non-unionized employees sought to bring workplace-related claims, such as wage and hour violations, on a class-wide basis.  In response, 24 Hour Fitness sought to compel the employees to submit their common claims to individual arbitrations, citing the policy in its handbook.

A hearing before an Administrative Law Judge is scheduled for June 11.  That may well be postponed, however.

You may recall that, in January of this year, Workplace Update featured a post (found here) about the NLRB’s decision in D.R. Horton, Inc.  There, the Board ruled that the employer, a home building company, violated Section 8(a)(1) of the Act by requiring employees to sign a mandatory arbitration agreement that prohibited joint, class, or collective employment-related claims in any forum, arbitral or judicial.  We will post any further developments in that case as they become available.

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