US labor board reconsiders rule that allow gag orders in arbitration agreements

The move could lead to more worker-friendly arbitrations.

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Back in 2020, the National Labor Relations Board (NLRB) ruled that companies requiring employees to go into arbitration to settle disputes can add a confidentiality clause to the agreement. Now, the agency is rethinking its decision. The NLRB has posted an invitation for the public to submit briefs on whether it should adopt a new legal standard to determine if gag orders in mandatory arbitration agreements violate Section 8(a)(1) of the National Labor Relations Act, as well as other legal issues.

Section 8(a)(1) states that it's unfair labor practice for employers to "interfere with, restrain or coerce employees" when it comes to exercising their right to self-organization. As Bloomberg Law states, this could lead to arbitration agreements that are more worker-friendly, since the absence of confidentiality clauses means they can talk about their issue publicly and ask help from the appropriate administrative agencies if needed.

Private arbitrations that force workers to keep mum about their issue and the proceedings are a controversial practice. They prevent workers who may be dealing with the same problem to connect, thereby preventing the public and the rest of a company's workers to see emerging patterns. Companies have landed in hot water for forcing issues like sexual harassment into arbitration in the past, that some have chosen to end the practice. Over 150 Riot Games employees staged a walkout after the developer forced the women who filed sexism lawsuits against it into arbitration in 2019. In the same year, Google decided to end forced arbitrations for sexual harassment cases after a walkout involving 20,000 workers. Airbnb and Activision Blizzard are two other companies that decided to stop forced arbitration for sexual harassment cases.