Do NLRB Terms Overrule The Franchise Arbitration Clause?

The arbitration clause contained in franchise agreements sets the terms in which disputes between the franchisee and franchisor will be settled. Most arbitration clauses require the franchisee and their employees to forego suing a franchisor in a court of law should a dispute arise and instead agree to have the matter settled by an impartial third-party arbitrator. The arbitration is usually conducted in the arbitrator’s office and could be held on the other side of the country away from the franchisee’s location.

Does the arbitration clause included in many franchise agreements violate the National Labor Relations Act? At least one administrative law judge thinks so. According to a recent article written for www.bluemaumau.org, Administrative Law Judge Elizabeth M. Tafe, found that Pizza the Pie and Becca Boo Pie, two Domino’s Pizza franchisees “engaged in unfair labor practices by compelling arbitration on an individual basis to preclude adjudication of collective claims in any form”. The judge found that the company’s arbitration agreement “expressly bars employees from exercising the right to pursue collective-employment claims in all forums.” The judge ordered that the companies to “either rescind or revise their policy or make clear to employees that the arbitration agreement doesn’t preclude them from pursuing collective actions or filing charges with the NLRB.” Judge Tafe declared arbitration agreements that contain waivers illegal, citing the NLRB’s existing precedent.

Source: http://www.bluemaumau.org/15816/nlrb_slaps_domino%E2%80%99s_franchisee_making_workers_waive_rights_class_arbitration