Published on:

NLRB rules that corporations may not strip employees of right to bring class actions

The National Labor Relations Board (NLRB) ruled today that corporations may not force employees to give up their right to bring class actions to enforce their rights.

In recent years, many corporations in the United States have required employees to give up their Constitutional right to use the American court system to hold them accountable when they violate their employees’ rights. Many corporations require applicants to sign these arbitration agreements before they’ll hire them and sometimes corporations will fire employees unless they sign them. Under these arbitration agreements, instead of a jury or a judge, corporations require employees to bring their claims to arbitration where, usually, one individual paid by the corporation decides the case. Some corporations have gone one step further and, through these arbitration agreements, have taken away employees’ rights to bring class actions–and that is what the NLRB’s decision forbids.

The NLRB ruled today that arbitration agreements which strip employees of their right to bring class actions violate the National Labor Relations Act (NLRA). The NLRA requires corporations to let employees engage in “concerted activity.” The NLRB decided that employees engage in concerted activity when they band together to bring a class action to vindicate the rights of them and their co-workers. Thus, under the NLRA, a corporation cannot require its employees to give up their right to bring a class action.

The NLRB’s decision is a victory for employees. If Corporations could eliminate class actions, they could get away with violating employees’ rights. For instance, without class actions, a corporation could steal wages from employees by forcing each of them to work 15 minutes per week for free. The corporation knows that few employees are going to complain and risk retaliation just for 15 minutes per week. Class actions prevent employers from engaging in this type of tactic. If employees can bring class actions, then only a small group of them need to complain about wage theft in order to protect the rights of all of their co-workers.