Pikes Peak for Poverty

Class Action Waivers in Arbitration Agreements

For a number of years, the law of the land has made it possible for employers to require that potential employees agree to arbitrate (as opposed to filing a lawsuit in a court of law) their disputes with their employers.  In addition, most employers have found success in requiring potential employees to waive their right to class action in arbitration.  The benefit to employers is that individual actions to redress a wage and hour violation are often too small to encourage employees and their chosen attorneys to file costly lawsuits.  This means that employers had an effective tool to help them ward off extremely costly and burdensome class action lawsuits on issues concerning wage and hour laws, discrimination, and other common sticky workplace situations.

Courts in at least five of the Federal Circuits have upheld these class action waivers.  But an argument long put forward by employees, and one which the National Labor Relations Board accepted last year, may be gaining traction.  Employees argue that a class action waiver violates their rights under the National Labor Relations Act, which governs the rights of employees to act collectively to bargain with their employer, to engage in collective “concerted activity” and that as such, the agreement should be unenforceable under the Federal Arbitration Act.

The National Labor Relations Board accepted this argument in the D.R. Horton case last year and invalidated a class action waiver in an arbitration agreement.  Now, the Seventh Circuit has adopted the same argument.  The Court gave deference to the D.R. Horton decision and held that class actions constituted “concerted activity” under the National Labor Relations Act.  It found that “[t]he NLRA’s history and purpose confirm that the phrase ‘concerted activities’ in Section 7 should be read broadly to include resort to representative, joint, collective, or class legal remedies.”  The Court then held that the NLRA trumps the Federal Arbitration Act, which requires courts to enforce legal arbitration agreements, and invalidated the class action waiver.

The Seventh Circuit’s holding goes against the decisions of courts in several other Federal Circuits.  These opposite conclusions on the same issue have set up what is known as a “Circuit split.”  When deciding whether to hear a case, the U.S. Supreme Court strongly considers whether such a split exists to resolve.  The likelihood that the Supreme Court will hear a case rises drastically if such a split exists.

Stay tuned.  This issue could be in front of the Supreme Court in the next few terms.

In Memorium: Alan Shubert

One of the original founders of Labor World, Alan Shubert, has passed away. Alan Shubert opened Labor World with his brother Larry and  Lou Morelli in 1974.

Many of the franchisees of Trojan Labor and Acrux Staffing started their careers at Labor World including CEO Rick Hermanns, President Dan McAnnar, Keith and Essee Hebert, Dale and Scott LaPorte, Larry and Bonny Levoy, and Brad and Amy Freeland. Alan Shubert celebrated 50 years in the staffing industry in 2015. He will be missed by all who knew him.

Palm Beach Atlantic University: Trojan Labor Scholarship Recipient

We are pleased to announce the 2016-2017 recipient of the Trojan Labor scholarship at Palm Beach Atlantic University, Ryan Mandala.  The Trojan Labor scholarship is given to students who have demonstrated a strong commitment to community service.

Ryan Mandala is from Long Island, NY and is majoring in Ministry. He serves in the inner city with Bow Down Church. He plans on pursuing a Masters in Divinity Studies and wants to start a discipleship center in North Carolina for inner city children.



Join our Team!

We are currently looking for construction workers who are dedicated and motivated to do a good job. We have several openings and would love to put you to work! Swing by our office between 9:00 AM and 3:00 PM to fill out an application or give us a call to find out more about what we do here at Trojan Labor. We look forward to hearing from you!