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NLRB Judge Rules Against SolarCity's Arbitration Agreement

On Friday, September 8, 2017, National Labor Relations Board ("NLRB" or the "Board") Administrative Law Judge Eleanor Laws ruled that SolarCity Corp. ("SolarCity") maintained arbitration agreements with its employees which were illegal due to the fact that they could be read by workers as restricting their rights to file unfair labor practice charges with the NLRB.

The Board found that a reasonable employee would read the agreement as requiring all employment disputes to be settled through arbitration, therefore violating the National Labor Relations Act. Judge Laws focused on the language of the agreement-specifically, the phrase "without limitation" which was used to describe which disputes would, under the agreement, be subject to arbitration. The Judge found that there was no reason to include the qualifier if not to confuse the reader.

The arbitration agreements at issue were imposed as a condition of employment on all employees of SolarCity.

Judge Laws told SolarCity to rescind the mandatory arbitration program at issue or revise it to make it clear to workers that the agreement does not bar or restrict employees' right to file charges with the NLRB.

The legal team at SFMS has significant experience litigating securities matters. If you have any questions regarding this subject or this posting, please contact Nick Lussier ([email protected]) or Chiharu Sekino ([email protected]). We can also be reached toll-free at (866) 540-5505.

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Lidgett, Adam. "NLRB Judge Finds Fault With SolarCity Arbitration Pacts." Law 360. Last modified on September 11, 2017.

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