Horton Hears an Employer Victory

Last December, the Fifth Circuit issued its long-awaited decision in D.R. Horton, Inc. v. NLRB, holding that employers may require employees to sign arbitration agreements categorically waiving the right to pursue employment claims in a collective or class action. In doing so, the Fifth Circuit’s rejected the NLRB’s opinion that such agreements violate employees’ right under Section 7 of the NLRA to engage in “concerted activities for the purpose of collective bargaining or other mutual aid or protection.”

As the New York Times and others noted, the Fifth Circuit’s decision represents a big win for employers, who frequently use arbitration agreements and class waivers to minimize exposure to costly litigation. Viewed alongside decisions in the Second and Eighth Circuits also upholding class action waivers in arbitration agreements and declining to follow the NLRB’s contrary opinion, the Fifth Circuit’s holding in D.R. Horton signals a growing consensus in favor of labor arbitration, one that the Ninth Circuit has suggested it will join if given the chance.

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