A decision handed down by the U.S. Court of Appeals for the Fifth Circuit in New Orleans Tuesday upheld the use of class or collective action waivers in arbitration agreements.

The decision in D.R. Horton Inc. v. National Labor Relations Board, argued before the court back in February, overturned the NLRB’s previous decision, which held that the massive Texas-based residential building company was violating the National Labor Relations Act when it required employees to sign a waiver that prevents them from entering class or collective actions against their employer.

Ron Chapman Jr., shareholder at Ogletree Deakins, represented D.R. Horton in the case along with Christopher Murray, another Ogletree shareholder. Chapman told CorpCounsel.com that he believes the ruling is a victory not just for his client but for employers across the country.

“We’re obviously thrilled with the decision—it validates the position we’ve been taking for a long time now,” he said.

In 2006, D.R. Horton began making its workers sign a “Mutual Arbitration Agreement,” which required that employees use final and binding arbitration to resolve claims and disputes rather than bringing them before a court of law. The agreement also included a class and collective action waiver. Michael Cuda, a D.R. Horton superintendent who had signed the agreement, along with a class of similarly situated superintendents, tried to get a Fair Labor Standards Act (FSLA) case arbitrated as a class, only to be barred from doing so. Cuda then filed an unfair labor practice charge under the NLRA.

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