National Labor Relations Board Judge Rules United Wholesale Mortgage Employment Agreements Violate Labor Laws

Last month, an Administrative Law Judge of the National Labor Relations Board (“Board”) issued a “decision to watch” regarding an arbitration clause in United Wholesale Mortgage’s (“UWM”) employment agreement. If this decision stands, it could affect arbitration provisions that other employers commonly use.

The case concerns an employment agreement that UWM required all employees to sign. The Board’s General Counsel accused UWM of violating the National Labor Relations Act by including an arbitration clause that restricted employee access to Board processes. In her decision, the ALJ agreed, holding that the arbitration clause was unlawful because employees could reasonably interpret it as mandating submission of unfair labor practice claims to arbitration instead of to the Board. The provision at issue stated that, in the event of a material dispute, the parties would engage in binding arbitration and that employees waived their right to a trial in court for discrimination or statutory claims, committing to binding arbitration. The ALJ further held the savings clause in the agreement, which stated that nothing in the agreement would restrict the right to report law violations to government agencies, including the Board, was insufficient because it did not explicitly address the right to file charges and did not directly reference the arbitration provision. Pending final Board approval and subsequent appeals, UWM will be required to revise contracts dating back to December 21, 2021 to eliminate the provisions held to be unlawful and to provide the revised versions to current and former employees.

As a result, employers should consider revising their arbitration language to avoid unfair labor practice charges and ensure enforceability. For further assistance, please contact one of Honigman’s Labor and Employment Attorneys here.