Tag Archives: mandatory arbitration agreements

District Courts in the Third Circuit Enforce Waivers of Class and Collective Arbitration

On April 3, 2017, a federal district court in New Jersey rejected the National Labor Relation Board’s (“NLRB”) D.R. Horton and Murphy Oil holdings and upheld employee waivers of class and collective arbitration. In dismissing wage and overtime claims brought by an employee of Chili’s Grill & Bar, District Judge Noel Hillman ruled that such mandatory arbitration agreements do not violate the National Labor Relations Act. Cicero v. Quality Dining, Inc., et al, 1:16-cv-05806 (April 3, 2017).

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Labor and Employment Alert: Based on NLRB’s latest ruling, review your arbitration agreements

On January 3, 2012, the National Labor Relations Board (the “Board”) ruled in D.R. Horton, 37 NLRB No. 184, that certain mandatory arbitration agreements which prohibit the arbitration of class and collective actions are a per se violation of the National Labor Relations Act (NLRA). The long-awaited decision applies to all employers, union and nonunion alike.

D.R. Horton’s background facts

Richard Cuda was employed as a superintendent by D.R. Horton Nationwide Homebuilder, Inc., a nonunion employer. In 2008, he sent D.R. Horton a notice of his intent to arbitrate, on behalf of himself and all similarly-situated superintendents, the issue of whether D.R. Horton misclassified its superintendents as exempt employees under the Fair Labor Standards Act (and, consequently, whether superintendents were owed overtime pay). When D.R. Horton informed Cuda that he could not arbitrate these claims as a class, he filed an unfair labor practice charge with the Board relating to the arbitration agreement’s prohibition of collective and class actions. 

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