Courts Reject NLRB’s Ruling That Arbitration Agreements Violate NLRA

Three district courts to consider D.R. Horton have distinguished or rejected the NLRB's holding that it was a violation of the NLRA to condition employment on an agreement providing all employment disputes and claims would be resolved in arbitration.

On January 6, the National Labor Relations Board (Board or NLRB) ruled that home builder D.R. Horton's mutual arbitration agreement (MAA) violated the National Labor Relations Act (NLRA) because it required employees—as a condition of employment—to forgo class and collective action court and arbitration proceedings. D.R. Horton, Inc., 357 N.L.R.B. No. 184. In the two months since the NLRB issued its decision, several federal district courts have considered whether agreements similar to the MAA were invalid under the reasoning set forth in D.R. Horton. Thus far, every district court to consider D.R. Horton has refused to rely on it and upheld the arbitration agreement at issue.