If you’re like a lot of employers, you have incorporated arbitration agreements into your hiring process because you like the efficiency they bring when it comes to resolving disputes with your workers. Arbitration is a much cheaper and faster process than going to court, and it’s certainly less unpredictable.
But a decision last summer from the National Labor Relations Board suggests that it might be a good idea to have an employment lawyer look over your arbitration agreement to make sure it’s not inadvertently running afoul of labor laws.
In that case an employer, Prime Healthcare, had required employees to sign an arbitration agreement that included broad language stating that any dispute that could otherwise be resolved in federal or state court was subject to arbitration.
While the agreement didn’t say anything about claims brought under the National Labor Relations Act being subject to arbitration, it didn’t directly exclude them from arbitration either. But it did exclude worker’s compensation and unemployment claims.
Employees complained to the NLRB, arguing that the language could be read as preventing them from filing charges with the agency, a serious problem under federal labor law.
The NLRB agreed, finding that even if the language was technically neutral, if the provision could potentially make workers think they couldn’t file NLRB charges, it had to go. The agency also ruled that the employer had to notify current and former employees that the agreement was no longer in effect.
Can you assume your arbitration agreement is safe? As this case illustrates, it’s not safe to make such assumptions at all. The safer bet is to run your agreement by a lawyer.