NLRB Refines Scope of Arbitration Confidentiality Clauses
A recent NLRB decision permits employers to mandate confidentiality over the substance and outcome of arbitration, but finds a ban on disclosing the proceeding's existence violates the NLRA.
In Ralphs Grocery Company, the National Labor Relations Board (NLRB) held that employers can lawfully require employees to keep the content and outcome of an employment arbitration proceeding confidential. The Board reasoned that such rules govern the arbitration process itself and are therefore protected by the Federal Arbitration Act (FAA).
However, the Board distinguished this from a broader ban on disclosing the mere existence of an arbitration. It found that prohibiting employees from discussing the existence of a dispute resolution proceeding is not protected by the FAA and acts as a perpetual gag order, unlawfully chilling employees’ Section 7 rights under the National Labor Relations Act (NLRA) to discuss workplace issues. The ruling also upheld an agreement's "savings clause," which explicitly preserved employees’ rights to file charges with the NLRB, finding that under the current Stericycle standard a reasonable employee would understand they remain free to access the agency.
Counsel should advise clients who use mandatory arbitration agreements to review the scope of their confidentiality provisions, ensuring they are narrowly tailored to the content and outcome of proceedings and do not prohibit disclosure of an arbitration's existence.