Fifth Circuit Rejects NLRB Ruling, Finding Class Action

On December 3, 2013, the Fifth Circuit issued a ruling in the closely watched collective and class action waiver arbitration case, D.R. Horton v. NLRB. The National Labor Relations Board (“NLRB”) previously found that D.R. Horton’s arbitration agreement with its employees violated the National Labor Relations Act (“NLRA”) because the agreement prohibited employees from filing joint, class, or collective claims. On appeal, the Fifth Circuit disagreed, finding that the NLRB did not give proper weight to the Federal Arbitration Act (“FAA”), which was enacted to prevent courts from treating arbitration agreements less favorably than other contracts.