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Arbitration Gag Orders Called a Threat to Labor Law Enforcement

March 23, 2022, 9:45 AM

The U.S. Labor Department told the National Labor Relations Board that confidentiality provisions like the type the board allows in arbitration agreements can silence workers and undermine the complaint-based system of workplace law enforcement.

The Labor Department called workplace gag orders a “direct threat” to its ability to enforce employment laws. It did so in response to the NLRB’s call for feedback on its reconsideration of a pair of Trump-era precedents on arbitration agreements. The deadline for briefs was Monday, but only a handful of filings were publicly available as of Tuesday.

Despite that critique and unlike other briefs, the Labor Department’s filing didn’t expressly say whether the NLRB should overturn its 2020 ruling in California Commerce Club, which permits confidentiality agreements in arbitration clauses.

The department didn’t address the other decision the board sought comment on, its 2020 ruling in Anderson Enterprises, which said arbitration agreements that would otherwise unlawfully block workers’ access to administrative agencies can be fixed by a disclaimer clarifying their rights.

The board asked for outside briefing in January in a case involving Ralphs Grocery Co.

The Democratic-controlled NLRB is reviewing the two arbitration precedents in the shadow of the U.S. Supreme Court’s 2018 ruling in Epic Systems v. Lewis, which overturned board law saying the National Labor Relations Act prohibited class-action waivers in mandatory workplace arbitration agreements.

The board’s reconsideration of its precedents also comes amid shifts in the law on forced arbitration in the workplace.

President Joe Biden in March signed into law a measure prohibiting the enforcement of contracts that require arbitration of workplace sexual harassment or assault claims.

The U.S. House went even further last week, passing legislation that would void all mandatory arbitration contracts in employment and other settings. That bill awaits consideration in the Senate, which is evenly split between Republican and Democratic lawmakers.

Narrow Gag Orders

While the Labor Department argued that confidentiality provisions can inhibit worker complaints, the Workplace Policy Institute, a pro-management group, said the clause at issue is narrowly tailored to cover just the arbitration proceedings.

“It does not prohibit employees from discussing terms and conditions of employment outside of the arbitration proceedings,” that group said in its brief. “Moreover, given that the arbitration policy also expressly allows the filing of charges with the NLRB, it does not require employees to keep the evidence, arguments, and outcome of such proceedings confidential.”

More broadly, the Workplace Policy Institute urged the board to keep its California Commerce and Anderson Enterprises decisions in place because they comport with the Supreme Court’s instruction that arbitration agreements must be enforced as written.

Private dispute resolution is governed by the Federal Arbitration Act, and isn’t the “bread and butter” of the NLRA, the group said. Efforts by the NLRB to void an “otherwise lawful arbitration agreement directly collides with this well-established law,” it said.

‘Only the NLRA’

But the NLRB hasn’t interpreted the Supreme Court’s order that arbitration agreements must be enforced as written to mean that all clauses contained in them are legal, the AFL-CIO said in its brief.

The board has ruled that such agreements violate labor law if they restrict workers’ access to filing claims with administration agencies or if confidentiality clauses silence workers about their settlements, the largest U.S. labor federation pointed out.

The high court’s decision in Epic Systems said that the arbitration law trumped the labor relations law where it concerned arbitration procedure, but gag orders only deal with workers’ substantive rights, Public Justice and the National Employment Lawyers Association said in their brief.

“Only the NLRA has anything to say about that,” the groups said.

The case is Ralphs Grocery, N.L.R.B., Case 21-CA-073942, Briefs filed 3/21/22.

To contact the reporter on this story: Robert Iafolla in Washington at

To contact the editors responsible for this story: Andrew Harris at; Martha Mueller Neff at