## Facts

- Murphy Oil USA, Inc. required job applicants and employees, as a condition of employment, to sign a “Binding Arbitration Agreement and Waiver of Jury Trial.”
- The agreement required arbitration of employment-related disputes on an individual basis and barred employees from initiating, joining, or participating in group, class, or collective actions in court, arbitration, or any other forum.
- The agreement also prohibited consolidation of an employee’s claim with any other person’s claim.
- Employees filed a collective action in federal court under the Fair Labor Standards Act alleging unpaid overtime and off-the-clock work; the court compelled individual arbitration under the agreement.
- An employee filed an unfair labor practice charge alleging the agreement interfered with employees’ Section 7 rights and would be read to bar filing charges with the NLRB.
- Murphy Oil issued a revised agreement stating it did not preclude filing NLRB charges, but it continued to require individual arbitration and a class/collective waiver.

## Issues

1. Whether requiring employees, as a condition of employment, to sign an arbitration agreement waiving class or collective proceedings in all forums violates NLRA § 8(a)(1) by interfering with employees’ Section 7 concerted-activity rights.
2. Whether maintaining an agreement employees would reasonably read as restricting the filing of unfair labor practice charges violates NLRA § 8(a)(1).
3. Whether the Federal Arbitration Act requires enforcement of the class/collective waiver notwithstanding the NLRA.

## Decision

- The Board held Murphy Oil violated NLRA § 8(a)(1) by maintaining and enforcing an arbitration agreement that required employees to waive participation in class or collective actions in any forum.
- The Board held Murphy Oil also violated NLRA § 8(a)(1) by maintaining agreement language employees would reasonably read as restricting access to the NLRB, notwithstanding later revisions aimed at clarifying charge-filing rights.
- The Board concluded the FAA did not compel enforcement of an arbitration agreement that, as written and applied, required waiver of substantive rights protected by the NLRA.
- The Board ordered Murphy Oil to cease and desist from maintaining or enforcing the unlawful terms, rescind or revise the agreement to preserve employees’ rights (including to pursue class/collective claims and to file Board charges), and reimburse employees for expenses and legal fees incurred opposing enforcement of the agreement in court.

## Legal Principles

- Section 7 protects employees’ right to engage in concerted activity for mutual aid or protection, including the pursuit of work-related legal claims jointly through judicial or administrative forums.
- An employer violates NLRA § 8(a)(1) by conditioning employment on an agreement requiring individualized dispute resolution and waiving employees’ ability to pursue class or collective employment-related claims in any forum.
- An employer’s efforts to enforce such a mandatory class/collective waiver (including seeking to compel individual arbitration and foreclose collective litigation) may constitute an independent § 8(a)(1) violation.
- Maintaining workplace rules or agreements that employees would reasonably construe as limiting the right to file unfair labor practice charges with the NLRB violates § 8(a)(1).
- The FAA’s enforcement policy does not require enforcement of arbitration provisions that are unlawful because they require waiver of substantive rights guaranteed by another federal statute.

## Conclusion

The NLRB ruled that Murphy Oil unlawfully interfered with protected concerted activity by requiring employees to accept individual-only arbitration and broad class/collective-action waivers and by maintaining language that could be read to restrict access to the Board, and it ordered rescission or revision of the agreement and make-whole relief tied to the employer’s enforcement efforts.


Murphy Oil USA, Inc., 361 N.L.R.B. 72 (2014)