University's Arbitration Rules Are Unlawful, Says Labor Relations Board

Everglades College Inc, teaching as Keiser University and Everglades University, was told by a National Labor Relations Board (NLRB) judge recently that its policy of requiring workers to sign arbitration agreements forbidding class actions was in violation of federal law. Judge Melissa Olivero told the Florida university that the agreement was likely to wrongfully give to impression that workers could not file any NLRB charges.

The EAA prohibits class or collective actions in arbitration.

The judge’s recommended order told the college that it should no longer maintain or enforce the arbitration agreement as a condition of employment, as long as the arbitration agreement banned class or collective action for those who signed it. The school’s current agreement, the Employee Arbitration Agreement (EAA) specifies that workers waive the right to have claims heard or arbitrated as a class action.

A previous case, D. R. Horton, saw the NLRB rules that employers could not force workers to give up the right to litigate as part of a collective action – and Judge Olivero ruled that the two cases dealt with the same issue. As such, the EEA is unenforceable and illegal.

She noted that “employees cannot seek judicial redress of any kind under the EAA, and the EAA prohibits class or collective actions in arbitration.”

The EEA’s language could also be read to mean that filing unfair labor charges with the NLRB was forbidden, the ruling said. This would lead to the false impression that employees were bound not to take action. The ruling also pointed out that workers cannot be assumed to have a good knowledge of the law regarding mandatory arbitration, and that the university made no effort to explain the meaning of certain phrases. An employee who was fired for refusing to sign the arbitration pact had been discriminatorily discharged, said the judge, recommending that they be reinstated and offered any lost earnings or benefits.

The school will now have the chance to decide whether to rework or remove the EEA, rather than being ordered to by the board.