The National Labor Relations Board has ruled that a collection agency is engaging in unfair labor practices and ordered it to stop using a mandatory arbitration clause in its agreements with employees because the language in the agreement restricts the rights of employees when an employment dispute occurs.
A copy of the ruling in the matter of GC Services Limited Partnership can be accessed by clicking here.
For more than four years, the company has required all employees, including executives, to sign a Mutual Agreement for Dispute Resolution. That document, which is a condition of employment with the company, includes the following language:
It is the intent of the parties hereto that all legally cognizable disputes between them that cannot be resolved to the parties’ satisfaction through use of the Company’s personnel policies, must be resolved by final and binding arbitration. Claims subject to arbitration include all legally cognizable claims in the broadest context and include, but are not limited to, any dispute about the interpretation, applicability, validity, existence, enforcement, or extent of arbitrability of or under this Agreement, and any claim arising under federal, state, or local statute, regulation, or ordinance, any alleged contract, or under the common law.
Arbitration is required, according to the document, for “any claim under the National Labor Relations Act or state or local law or regulation.”
While it is perfectly acceptable for companies to require disputes be resolved through arbitration, the NLRB determined that the language in the company’s agreement was too specific and ruled “out any possibility that claims arising under the NLRA may be resolved in any way other than through final and binding arbitration even if employees can file complaints with administrative agencies, implicitly including the Board.”
The company pointed to another section of the agreement that stated, “The parties jointly agree neither may file any lawsuit to resolve any dispute between them but Employee may file a complaint with any federal, state, or other governmental administrative agency, regarding any perceived infringement of any legally protected rights,” as evidence that a complaint could be filed with the NLRB, but the agency ruled that the more specific language of the agreement that said any NLRA dispute was to be handled through arbitration was what any judge would look at when reviewing the validity of the agreement.