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Should You Say Good Bye to Arbitration Agreements and Recording Bans?
Since I have never written about bans on recording in the workplace, let’s look at that issue first. You may have such a policy in your workplace. A number of employers do and many have valid reasons for having them. That said, the NLRB has ruled against at least one employer that prohibited its workers from making recordings. In Whole Foods, 363 NLRB No. 87 (2015), the NLRB reasoned that the policy violated Section 7 of the NLRA (i.e. employees’ rights to engage in “concerted activity” for “mutual aid and protection”) because some workplace conversations and events may relate to conditions of employment. Some examples might be picketing, concerns about workplace safety, whether workplace rules are applied consistently, etc.).
Now, many of you may feel that the NLRB goes a bit far in its rulings and interpretations. Often the courts agree. That didn’t happen this time, however. Whole Foods appealed to the Second Circuit Court of Appeals, and last week, (June 1 to be exact) the Second Circuit upheld the NLRB ruling. Why? The problem is that Whole Foods issued a blanket ban. A policy limiting recordings does not automatically run afoul of the NLRA. If your policy has a specific purpose and is carefully worded to reflect and promote that purpose it may very well fly under the NLRB’s radar. For example, the NLRB even cited as an example, its decision to allow a hospital to ban recordings that on the basis of protecting patient privacy. If your company has a similar concern, your policy should articulate that. If your policy merely states a desire or intent to maintain “confidentiality” or “encourage honest dialogue” it probably will not pass NLRB muster. Bottom line: if you impose a recording ban, now is a good time to re-visit and revise that policy.
Let’s move on. How ’bout those arbitration agreements? Why are we back to this topic again? You probably feel you’ve heard all you need to hear about them. Well, just bear with me a minute or so, OK? First, let’s do a quick recap of D.R. Horton. In brief, the NLRB in D.R. Horton ruled that a mandatory arbitration agreement that requires employees “as condition of their employment, to sign an agreement that precludes them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions against the employer.” violates the NLRA. The Fifth Circuit has twice invalidated D.R. Horton. The NLRB has made it clear that until the US Supreme Court says differently it will continue full steam ahead (and basically ignore the Fifth Circuit).
The NLRB has effectively upheld its own ruling in subsequent cases, such as Murphy Oil Soap, Epic Systems Corp v Lewis, and Ernst & Young, LLP v Morris. Those cases are now consolidated and pending before the US Supreme Court. That’s not really news though. What is news is that the 6th Circuit, rather than waiting a few months for a Supreme Court ruling on the issue, just handed down a ruling on a similar case, NLRB v. Alternative Entertainment Inc, in which it aligned itself with the NLRB and the 7th and 9th Circuits, holding that class action waivers in employment agreements violate the NLRA. This ruling at the very least, accentuates the split among the circuits.
What does this new wrinkle mean for you? That depends on: a) whether you require your employees to sign a mandatory arbitration agreement; and b) if so, whether that agreement requires employees to waive the right to class or collective action lawsuits. If your agreement does not have such a waiver, then it is not even an issue for you. You might wonder what point there is in having an agreement that only fends off individual lawsuits. Isn’t the idea of an arbitration agreement to streamline the dispute resolution process and control costs? Yes, but even an agreement without such a waiver is helpful, because individual lawsuits can still be lengthy and expensive, particularly if you are a smaller employer, who therefore faces less risk of collective or class action lawsuits. Suppose, however your agreement do have such waivers. Now the question depends on where your employees work. If your employees work in Kentucky, Michigan, Ohio, Tennessee, Illinois, Indiana, Wisconsin, Alaska, Arizona, Hawaii, California, Idaho, Montana, Oregon and Washington (State) then you have to be more careful–at least for now. If your employees work elsewhere, you can probably sit tight and wait for the US Supreme Court to rule.
So what’s the bottom line? You can still limit recordings in your workplace, as long as you don’t ban all recordings outright. You can still use arbitration agreements, though depending on where your employees work, you may want to leave the class action waivers out of them for now. Finally, stay tuned and see what the Supreme Court does.
OK, well that’s all I’ve got for now, so I’ll end here. See you next week!