A recent decision from the National Labor Relations Board (“NLRB”) held that an agreement barring an employee from discussing the results of an employment arbitration violates federal law. This decision is likely to have future impacts on contractual agreements between employees and employers.
The National Labor Relations Act (“NLRA”) is a federal law that protects the rights of employees to organize and collectively bargain with their employers. The Federal Arbitration Act (“FAA”) is a federal law that requires the enforcement of “arbitration clauses,” which are agreements that require disputes to be submitted to arbitration instead of being litigated in a court of law.
These two laws can come into conflict with one another in the employment context. The most common case is when employees who feel as though they were mistreated at their job wish to group together to bring a claim against their employer, spreading out costs that would otherwise be too expensive. Employers may attempt to prevent this from happening by requiring that their employees sign employment agreements containing arbitration clauses upon being hired. This will instead force the employees to bring any claims through arbitration, where they can no longer band together with one another to cover the high costs of litigation.
The question for the courts last year in Epic Systems Corp. v. Lewis became which law trumped the other — the NLRA or the FAA? The Supreme Court ended up ruling in favor of employers, finding that the FAA required enforcement of arbitration clauses despite any conflicts with the NLRA. See Epic Systems Corp. v. Lewis, 584 U.S. ____, 138 S.Ct. 1612 (2018).
Now, a new issue is being addressed: whether confidentiality provisions in employment agreements, which prevent employees from discussing the process or results of an arbitrated dispute, may be upheld despite these provisions conflicting with the NLRA.
Just recently, the National Labor Relations Board ruled in the affirmative and held that these confidentiality clauses do in fact conflict with the NLRA and must be held unenforceable.
This decision greatly affects the rights of workers and employers alike. If you have questions about how this decision may affect your business or your rights as an employee, or you have questions about how you can be better protected, please schedule an appointment to speak to one of our attorneys today.