NLRB Holds Mandatory Arbitration Provision Can Violate NLRA

For those with mandatory arbitration agreements for employment issues, the Board's opinion last week in U-Haul Company of California (NLRB. Case 32-CA-20665-1 6/8/06) [pdf] deserves a close reading. In a 2-1 decision it held an employer was in violation of § 8(a)(1) and (4) of the National Labor Relations Act by requiring that employees as a condition of employment agree to binding arbitration for all employment related disputes.

The problem -- it did not make clear that employees were not prohibited from filing charges of NLRA violations with the Board:

We recognize that the language in the arbitration policy does not explicitly restrict employees from resorting to the Board’s remedial procedures. However, the breadth of the policy language, referencing the policy’s applicability to causes of action recognized by “federal law or regulations,” would reasonably be read by employees to prohibit the filing of unfair labor practice charges with the Board. Plainly, the employees would reasonably construe the remedies for violations of the National Labor Relations Act as included among the legal claims recognized by Federal law that are covered by the policy. Thus, we find that the language of the policy is reasonably read to require employees to resort to the Respondent’s arbitration procedures instead of filing charges with the Board.

A hat tip to Ross Runkel at Ross Employment Law Blog for his post, NLRB takes aim at arbitration clause. As he points out the case is important:

because the Board held the arbitration policy on its face was an unfair labor practice, even though there was no proof that anybody had ever been deterred from utilizing the NLRB's processes.

A wise time to check your policy to make sure that it has some exclusionary language that would prevent it from falling in the same trap. The employer and the dissent argued that U-Haul's policy did have language that would have prevented the confusion, but the majority disagreed.