Another Day Another NLRB Decision Invalidating Arbitration Agreements

An NLRB Administrative Law Judge issued a decision against a Domino’s franchisee for violating the National Labor Relations Act. The franchisee required employees, as a condition of employment, to agree to pursue legal disputes with the restaurant owners in binding arbitration on an individual basis. Thus, the employees waived their rights to pursue class and collective legal action. We all know how this works out for the employer….

The primary question in this case was whether the company’s arbitration agreement violated the NLRA. The agreement clearly and expressly barred employees from exercising their right to pursue collective employment claims in all forums. Administrative Judge Tafe concluded that, although circuit courts generally disagree, she must apply the Board’s rationale in D.R. Horton and Murphy Oil USA to the instant case. She summarized her decision as follows:

Having found that Respondent engaged in unfair labor practices, I shall order it to cease and desist from such conduct and to take certain affirmative actions designed to effectuate the policies of the Act.

She continued that the employer must either rescind or revise the policy or make clear to employees that the arbitration agreement does not preclude them from pursuing collective actions or filing charges with the NLRB. Oh yeah, the employer must also reimburse the plaintiff for attorneys’ fees related to his opposition of the franchisee company’s request that his lawsuit be sent to arbitration.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at