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National Labor Relations Board
June 19, 2020
SUPPLEMENTAL DECISION AND ORDER
The question presented in this case is whether an agreement providing for arbitration of employment-related disputes violates the National Labor Relations Act (the Act or NLRA) on the basis that it includes 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." This provision affects employees' exercise of their rights under Section 7 of the Act to the extent that it restricts their freedom to discuss terms and conditions of employment. See St. Margaret Mercy Healthcare Centers, 350 NLRB 203, 205 (2007) ("It is axiomatic that discussing terms and conditions of employment with coworkers lies at the heart of protected Section 7 to the extent that it restricts their freedom to discuss terms and conditions of employment. activity."), enfd. 519 F.3d 373 (7th Cir. 2008). However, this provision is contained in an arbitration agreement, the enforceability of which is governed by the Federal Arbitration Act (FAA). In Epic Systems Corp. v. Lewis, 584 U.S. ___, 138 S. Ct. 1612, 200 L. Ed. 2d 889 (2018), the Supreme Court held that agreements containing class- and collective-action waivers and stipulating that employment disputes are to be resolved by individualized arbitration do not violate the NLRA [*2] and must be enforced as written pursuant to the FAA. The question presented here is whether the disputed confidentiality provision in the Respondent's arbitration agreement likewise does not violate the NLRA. For the reasons that follow, we hold that the confidentiality provision at issue here does not violate the NLRA, and we overrule prior Board decisions to the extent they are inconsistent.
Our determination that the confidentiality provision at issue in this case is lawful under the Act does not mean, however, that any confidentiality provision is lawful merely because it is included in an arbitration agreement. As the Supreme Court explained in Volt Information Sciences, Inc. v. Board of Trustees of Leland Stanford Junior Univ., "[a]rbitration under the [FAA] is a matter of consent, not coercion, and the parties are generally free to structure their arbitration agreements as they see fit. Just as they may limit by contract the issues which they will arbitrate . . . so too may they specify by contract the rules under which the arbitration will be conducted." 489 U. S. 468, 479, 109 S. Ct. 1248, 103 L. Ed. 2d 488 (1989) (internal citation omitted; emphasis added). Provisions that impose confidentiality requirements beyond the scope of the [*3] arbitration proceeding and "the rules under which the arbitration will be conducted" receive no protection from the FAA. Such provisions must be assessed under the same standards that apply to confidentiality rules generally. Moreover, any provision that purports to impose confidentiality requirements on unfair labor practice proceedings before the Board would violate the Act. If such a provision were to be included in an arbitration agreement, the FAA would not render it enforceable.
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2020 NLRB LEXIS 320 *; 2020-21 NLRB Dec. (CCH) P16,711; 369 NLRB No. 106
California Commerce Club, Inc. and William J. Sauk.
Reconsideration denied by, Motion denied by Cal. Commerce Club, 2020 NLRB LEXIS 410 (N.L.R.B., July 31, 2020)
Cal. Commerce Club, Inc. v. NLRB, 2018 U.S. App. LEXIS 18491 (D.C. Cir., July 5, 2018)
NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Executive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes.
arbitration, confidentiality, disclosure, workplace, unlawfully, mutual