Fifth Circuit Allows Class Waivers In Arbitration Agreements

In a long-awaited decision, the United States Court of Appeals for the Fifth Circuit recently held that class action waivers in employee arbitration agreements do not violate the National Labor Relations Act ("NLRA").

In D.R. Horton, Inc. v. National Labor Relations Board, the Fifth Circuit reversed an administrative decision by the NLRB, which had held that an employer violates Section 7 of the NLRA by requiring as a condition of employment that employees waive their right to pursue class action employment claims. The Fifth Circuit held that "the NLRA should not be understood to contain a congressional command overriding application of the [Federal Arbitration Act]," which the Supreme Court previously held allows contractual class action waivers. The Court of Appeals recognized further that "[e]very one of our sister circuits to consider the issue has either suggested or expressly stated that they would not defer to the NLRB's rationale, and held arbitration