June 23, 2020
On June 19, 2020, the National Labor Relations Board (NLRB) ruled that a confidentiality provision in an arbitration agreement does not interfere with employees’ rights under the National Labor Relations Act (NLRA) to discuss employment-related topics with each other. The decision (California Commerce Club, Inc., 369 NLRB No. 106), involved an individual agreement between a hotel and one of its employees which included the following provision: “The arbitration shall be conducted on a confidential basis and there shall be no disclosure of evidence or award/decision beyond the arbitration proceeding.”
Employers and their employees may enter into individual arbitration agreements to resolve employment-related disputes under the Federal Arbitration Act (FAA). The Supreme Court held in 2018 that agreements containing class- and collective-action waivers and stipulating that employment disputes are to be resolved by individual arbitration do not violate the NLRA and must be enforced under FAA.
The Board’s decision in California Commerce Club gives employers the ability to restrict, by prior agreement, disclosures of evidence presented in arbitration hearings as well as the results of those arbitration hearings, including arbitrators’ awards. Employees cannot be restricted, however, in their rights to discuss facts and information that they know about independently of the arbitration process.
The language used in the arbitration agreement in California Commerce Club is a good roadmap for employers to use in their arbitration agreements. However, before adding such a confidentiality provision to an arbitration agreement, employers should consult with labor counsel to ensure that all the facts and circumstances support such a change.
For more information, please contact Joseph P. Hofmann at jph@stevenslee.com or the Stevens & Lee attorney with whom you regularly work.
Related Attorney:
Joseph P. Hofmann
This News Alert has been prepared for informational purposes only and should not be construed as, and does not constitute, legal advice on any specific matter. For more information, please see the disclaimer.
