Time & Attendance
By James Denis
Feb. 13, 2012
Homebuilder D.R. Horton Inc. required its employees to sign an employment agreement that adjudicated legal claims by binding arbitration and waived any right to bring class-action claims.
The agreement was challenged after one of Horton’s superintendents, Michael Cuda, sought to initiate arbitration of a claim on behalf of all similarly situated superintendents nationwide, claiming that Horton had misclassified its superintendents as exempt from the overtime-pay requirements of the Fair Labor Standards Act notwithstanding the U.S. Supreme Court ruling last year in AT&T Mobility v. Concepcion that says federal law pre-empts state law for class-action lawsuits.
Cuda filed an unfair labor practice charge with the National Labor Relations Board, asserting that Horton violated the federal National Labor Relations Act by interfering with his legal right to join with other employees in filing a class-action lawsuit.
In a Jan. 3 decision, the NLRB ruled that “employers may not compel employees to waive their National Labor Relations Act right to collectively pursue litigation of employment claims in all forums, arbitral and judicial.” The AT&T Mobility ruling, the NLRB reasoned, was a case about consumer class actions, whereas the Horton case involves the workplace and substantive rights granted employees under the NLRA.
Moreover, employee rights under the NLRA include the right to collective action, which included the right to a consolidated arbitration or a class action. “So long as the employer leaves open a judicial forum for class and collective claims, employees’ NLRA rights are preserved without requiring the availability of classwide arbitration. Employers remain free to insist that arbitral proceedings be conducted on an individual basis.” D.R. Horton Inc. and Michael Cuda, Case No. 12-CA-25764, (Jan. 3, 2012).
IMPACT: Since many employers require agreements with the same restrictions as Horton’s, employers should anticipate further court and agency decisions on whether class-action claims may be brought before an arbitrator.
James E. Hall, Mark T. Kobata and Marty Denis are partners in the law firm of Barlow, Kobata & Denis, with offices in Los Angeles and Chicago. To comment email firstname.lastname@example.org.
Workforce Management, February 2012, p. 8 — Subscribe Now!
Come see what we’re building in the world of predictive employee scheduling, superior labor insights and next-gen employee apps. We’re on a mission to automate workforce management for hourly employees and bring productivity, optimization and engagement to the frontline.
ComplianceMinimum Wage by State in 2023 – All You Need to Know
Summary Twenty-three states and D.C. raised their minimum wage rates in 2023, effective January 1. Thr...
federal law, minimum wage, pay rates, state law, wage law compliance
LegalNew Labor Laws Taking Effect in 2023
The new year is fast approaching, and with its arrival comes a host of new labor laws that will impact ...
labor laws, minimum wage, wage and hour law
LegalWage and Hour Laws in 2022: What Employers Need to Know
Whether a mom-and-pop shop with a handful of employees or a large corporation staffing thousands, compl...
compliance, wage and hour law