In D.R. Horton, a group of employees sued the Company for alleged wage and hour violations. The Company sought to dismiss the lawsuit because the employees had previously signed mandatory arbitration agreements prohibiting them from instituting concerted or class action lawsuits against the Company. The Board ruled in favor of the employees holding that mandatory arbitration agreements are unlawful. This sparked many copycat claims with similar results. D.R. Horton appealed the Board’s ruling and won; the Board appealed that ruling to the Fifth Circuit and lost.
As it stands today, the Board’s decision in D.R. Horton only applies to that case. The Fifth Circuit ruled in favor of the Company and the Board did not appeal that decision to the United States Supreme Court. According to the NLRB, the Board will continue to follow its ruling in D.R. Horton until the U.S. Supreme Court changes the law. If the Board doesn’t appeal to the U.S. Supreme Court, then the Court can’t change the law. Therefore, the Board will continue finding mandatory arbitration agreements unlawful and hoping that one day a circuit court will agree. When that happens, a split in circuits occurs and the issue will be ripe for the U.S. Supreme Court to render a final ruling.