## Facts

- D.R. Horton, Inc., required employees, as a condition of employment, to sign a Mutual Arbitration Agreement (MAA).
- The MAA required arbitration of “all disputes and claims” between the company and employees, including wage-and-hour claims, and waived court trials.
- The MAA barred class or collective proceedings in arbitration and barred consolidation of claims.
- A superintendent who signed the MAA sought to initiate collective arbitration of Fair Labor Standards Act overtime claims on behalf of a putative nationwide group.
- Horton refused collective arbitration under the MAA but invited employees to pursue individual arbitrations.
- The employee filed an unfair labor practice charge alleging the MAA (1) unlawfully required waiver of joint/class/collective employment claims in any forum and (2) would lead employees to believe they could not file charges with the NLRB.
- An ALJ found a violation of NLRA § 8(a)(1) only because employees could reasonably read the MAA as restricting access to NLRB charge filing; the ALJ rejected the class/collective-waiver theory.
- A two-member NLRB panel found two § 8(a)(1) violations, including that the class/collective-action waiver unlawfully interfered with § 7 concerted activity, and ordered Horton to rescind or revise the MAA.
- Horton petitioned for review in the Fifth Circuit; the NLRB sought enforcement.

## Issues

1. Whether the NLRA bars an employer from requiring, as a condition of employment, an arbitration agreement that waives class or collective litigation/arbitration procedures, notwithstanding the FAA.
2. Whether the MAA unlawfully interfered with employees’ right to file unfair labor practice charges with the NLRB by reasonably suggesting such charges were barred.

## Decision

- The court granted Horton’s petition in part and denied enforcement in part, setting aside the NLRB’s ruling that the NLRA invalidates the MAA’s class/collective-action waiver.
- The court enforced the NLRB’s order in part, upholding the finding that the MAA violated § 8(a)(1) because employees could reasonably construe it as limiting their ability to file charges with the NLRB.
- The court required Horton to revise or clarify the MAA to make clear that employees retain the right to file NLRB charges.

## Legal Principles

- Under the FAA, arbitration agreements must be enforced according to their terms unless another statute contains a “contrary congressional command.”
- The NLRA does not provide a clear congressional command overriding the FAA with respect to enforcing bilateral arbitration agreements containing class/collective-action waivers for employment-related claims.
- NLRA § 7 protects concerted activity, but the use of class or collective action mechanisms is a procedural device rather than a substantive NLRA right that may be treated as nonwaivable in conflict with the FAA.
- Employers may not require employees, directly or by reasonably coercive contract language, to waive or forgo access to the NLRB’s administrative process; an agreement that employees could reasonably read as barring Board charges violates NLRA § 8(a)(1).

## Conclusion

The Fifth Circuit rejected the NLRB’s position that the NLRA invalidates class- and collective-action waivers in mandatory arbitration agreements because the FAA required enforcement absent a clear statutory override, but it upheld the Board’s finding that Horton’s agreement unlawfully suggested employees could not file NLRB charges and required clarifying revisions.


D.R. Horton, Inc. v. Nat’l Lab. Rels. Bd., 737 F.3d 344 (5th Cir. 2013)