On April 30, 2012, the National Labor Relations Board (“Board”) issued a complaint alleging that 24 Hour Fitness USA, Inc. violated the National Labor Relations Act (“Act”) by requiring that all employment disputes be resolved by an arbitration in which only individual, and not class or collective, claims could be brought.
24 Hour Fitness, which operates centers across the country, requires employees as a condition of employment, to execute an arbitration agreement, in which they forego any rights to file collective or class action lawsuits or arbitrations. Earlier this year, in D.R. Horton, Inc., 357 NLRB No. 1 (2012), the Board had held that such a requirement violates the protected rights of employees to engage in concerted activity under Section 7 of the Act.
The Board’s San Francisco Regional Office issued a complaint, which charged that the company had enforced its policy by asserting it in numerous actions in an effort to compel employees to submit common claims to individual arbitrations. The company engaged in an unfair labor practice by violating protections guaranteed by the Act, according to the complaint issued by the agency’s San Francisco Regional Office.
The Board’s action demonstrates that employers must examine their arbitration policies to see if they are in compliance. An effort by employers to compel employees to bring all employment-related claims through individual arbitration may be found to constitute an unfair labor practice.