NLRB Strikes Down AmEx Arbitration Policy

A recent decision from the NLRB demonstrates that even cleverly worded arbitration and class action policies are going to be a tough sell to the Board.
In Amex Card Services Company, NLRB Case no. 28-CA-123865, American Express required all new hires, and employees hired after June 1, 2003, to agree to resolve any employment-related dispute by arbitration, and to refrain from engaging in any class, representative or collective action. These requirements were memorialized in an explicit Amex policy, and new hires had to sign a form acknowledging these requirements. Here’s the quirk, though. The written policy excludes from its arbitration requirement any claim under the NLRA or any charge filed with a governmental administrative agency, such as the NLRB. The new hire form, however, did not include in its language these exemptions.
The Board first ruled that when the form and the policy were read together, an employee could reasonably believe that he or she waived any right to file a charge with the Board notwithstanding the exclusion in the policy. Like most contracts, the ambiguity between the two is resolved against the drafter. Second, the Board ruled that the arbitration policy is invalid on its face because it compels “employees to waive their Section 7 right to pursue such claims through class or collective action ….” Here, the Board referred back to the well-known D.R. Horton (357 NLRB No. 184 (2012)) case.
The Board has again expressed its dissatisfaction with policies that limit collective actions and free access to the Board’s administrative processes. Amex has vowed to appeal the decision, so this is likely not the last word on this matter.