New ruling says you can sue your employer, even if you signed an arbitration agreement.

Have you ever signed an arbitration agreement? You may not even realize it, but many employers sneak in arbitration clauses in employment contracts. Many employees need the job and so they sign the agreement, but by signing you may have agreed to an arbitration clause, which usually means you cannot bring your employer to court for a claim or join a collective action against the employer. But now a new ruling by the National Labor Relations Board (NLRB) changes that.

The NLRB issued a new ruling that states that an employees’ federal right to engage in a collective action against their employer trumps any signed arbitration agreements.  Learn how the new rules affect workers nationwide.

What are arbitration agreements?
Companies often require their employees to sign employment contracts when they are hired. Often, these contracts contain an arbitration agreement clause. This basically states that you cannot bring your employer to court over any legal issues – you must go to arbitration to settle claims. Arbitration is an alternative method of resolving claims instead of filing a lawsuit that involves a third party to decide the matter.

These agreements are beneficial only to employers because you lose almost any advantage if you have to bring a claim against your employer.

The rights you sign away in arbitration agreements:

  • You are required to submit any claims against your employer to a third party in arbitration.
  • You are not heard by your peers in a jury: Your claims will be heard by a third party.
  • You have no right to appeal: The arbitrator makes a binding decision for both parties. This decision usually cannot be appealed.
  • You cannot recover costs: Arbitration clauses usually never allow you to recover attorneys’ fees. 
  • You lose the right to join class action or collective action lawsuits.

New NLRB ruling will affect workers in the future.
Many companies will have to revise their company policies after this NLRB ruling. The new ruling would prohibit employers from requiring any arbitration policy that excludes employee’s right to bring collective or class actions. Employers can still require arbitration, but they must allow employees to bring any class actions.

If you want to learn more about the Fair Labor Standards Act and how it protects you, the employee, order our free book, The 10 Biggest Mistakes That Can Hurt Your Wage and Overtime Claim.