FootballOn October 28, 2014, the National Labor Relations Board (“NLRB”) issued its decision in Murphy Oil USA Inc., once again attempting to prohibit employers from requiring employees to enter into agreements to arbitrate employment disputes if those agreements preclude collective or class action litigation. As we have blogged about in the past, this new decision runs contrary to an overwhelming majority of federal district and appellate court decisions rejecting and criticizing the Obama NLRB’s previous attempt to so extend the law.  A copy of the Murphy Oil USA decision can be found here.

In Murphy Oil, the NLRB split 3-2 along party lines, with the majority finding that gas station chain Murphy Oil’s arbitration agreements were unlawful.  In so doing, the NLRB reaffirmed its controversial January 2012 DR Horton ruling, where the Board ruled that such agreements conflict with employees’ rights to engage in concerted activity under the National Labor Relations Act.  The Fifth Circuit Court of Appeals refused the enforce the Board’s order, and the NLRB declined to seek review from the U.S. Supreme Court.  In what some might say is refusing to take “no” for an answer, the NLRB is trying to resurrect its DR Horton decision.

The strong dissenting opinion in Murphy Oil accused the majority of not following the “clear instructions” from the U.S. Supreme Court in enforcing arbitration agreements under the Federal Arbitration Act, over which the NLRB has “no special authority or expertise.”  The dissent also declared that the majority’s “unsound approach” has met with “near universal condemnation from the federal and State Courts.”  The NLRB’s decision is another agency rebuke to how the federal courts have ruled.  An appeal of the Murphy Oil decision is very likely, as is the chance that a federal court will once again overturn the NLRB on this issue.

It is important for employers to note that, in overturning DR Horton, the Fifth Circuit did uphold the NLRB in one regard: its determination that the arbitration agreement could not lawfully bar an employee’s ability to file unfair labor practice charges with the Board. Even if an arbitration agreement doesn’t expressly bar access to the NLRB, it is an unfair labor practice if a reasonable employee could read the agreement to preclude the filing of charges.  Our previous blog on the federal court overturning DR Horton can be found here.

Employers who wish to consider implementing a mandatory arbitration program, or revise their existing arbitration program, should contact their Stoel Rives Labor & Employment attorney.