The U.S. Court of Appeals for the Fifth Circuit in a split decison in D.H. Horton v. NLRB, No. 12-60031, decided December 3, 2013, rejected the NLRB’s ruling that an agreement between employees and Horton requiring arbitration and prohibiting class or collective actions in arbitration was a violation of the National labor Relations Act.  That agreement also required that all employment related disputes be resolved individually through arbitration.  The Board panel of Pearce and Becker (Hayes had recused himself) had concluded that prohibiting employees from pursuing class or collective action claims in arbitration infringed on substantive rights under Section 7 of the Act. It also held that the agreement discouraged employees from filing charges with the Board.

The court in rejecting the Board’s position on class or collective actions focused on the Federal Arbitration Act which favors arbitration.  After a detailed analysis of the NLRB’s arguments as to why the NLRA should govern, rather than the FAA, the court concluded that the Board’s arguments lacked merit.  However, the court did enforce the Board’s order pertaining to discouragement of employees from filing charges with the Board.

The court also rejected challenges to the underlying Board decision based on the invalidity of Member Becker’s recess appointment and the timing of the expiration of his recess appointment.

The full text of the decision can be found at:

http://www.ca5.uscourts.gov/opinions/pub/12/12-60031-CV0.pdf