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D.R. Horton Can Require Agreements Barring Class Actions

Dec. 3 (Bloomberg) -- D.R. Horton Inc. won a U.S. appeals court ruling that it can require arbitration agreements barring workers from bringing class-action lawsuits against it.

The U.S. Court of Appeals in New Orleans today rejected a National Labor Relations Board determination that D.R. Horton violated federal labor law by requiring its employees to sign arbitration agreements prohibiting collective or class-action claims.

“We disagree” with the NLRB’s decision, “and conclude that the board’s decision did not give proper weight to the Federal Arbitration Act,” the appeals court said in a 2-1 decision.

The court upheld the NLRB’s requirement that D.R. Horton must “clarify with its employees” that such agreements don’t preclude their rights to pursue unfair labor practices claims with the NLRB, according to the ruling.

The NLRB is reviewing the court’s decision, Gregory King, a spokesman for the agency, said in a phone interview.

Jessica Hansen, a spokeswoman for D.R. Horton, didn’t immediately respond to a call after regular business hours seeking comment on the ruling.

D.R. Horton, based in Fort Worth, Texas, is the largest U.S. homebuilder by revenue.

The case is D.R. Horton Inc. v. National Labor Relations Board, 12-60031, U.S. Court of Appeals for the Fifth Circuit (New Orleans).

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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