In a previous post, we discussed arbitration clauses that prevent consumers from joining in a class action lawsuit. This post will focus on arbitration agreements that prevent employees from joining in a class action against their employer.
In August 2012, an unfair labor practices putative class action was brought against Bristol Farms ("Bristol") by Konny Renteria ("Renteria"). However, because of an arbitration agreement that Renteria signed as a Bristol employee, the California state court dismissed the class claims and sent the matter to arbitration.
Renteria then took her case to the National Labor Relations Board ("NLRB" or "Board") in California, which consequently ruled that the mandatory arbitration agreements for employees of Bristol violated the National Labor Relations Act ("NLRA") because the agreements prevented the right of individual employees to act concertedly for mutual aid and protection. Bristol revised its agreements to explicitly state that the agreement was optional, but the NLRB maintained that the agreements were illegal in a 2-1 ruling.
The majority argued that any agreement that would waive an employee's right to engage in concerted activity was unlawful. Even if the agreement is voluntary, employees may feel compelled to sign it because their employment is contingent on their compliance, as was the case in Murphy Oil USA, Inc., v. NLRB, No. 14-60800 (5th Cir. 2015) and D.R. Horton Inc. v. NLRB, No. 12-60031 (5th Cir. 2015). A "truly voluntary" waiver, as Bristol put it, would mitigate that sense of obligation to sign the waiver, but it still ultimately would prevent employees who sign it from partaking in class litigation - a right that is protected by the NLRA.
One of the Board members, Philip A. Miscimarra ("Miscimarra"), dissented from the ruling that the revisions were illegal. He purported that the revised agreement was lawful and the Board's decision was inappropriate because it stepped outside its boundaries. According to Miscimarra, the NLRA does not give the Board the authority to dictate any particular procedures pertaining to litigation of non-NLRA claims, nor does it entitle employees to class-type claims. Furthermore, the NLRA requires the Board to permit individual employees to waive their right to engage in concerted activity.
The majority claimed Miscimarra's argument was unfounded because the right to pursue joint, class, or collective claims that arise from the workplace is completely compliant with longstanding NLRB and judicial precedent, and that his interpretation of what the Board was required and barred from doing was misguided.
The legal team at SFMS has substantial experience litigating employment matters. If you have any questions regarding this subject or this posting, please contact Chiharu Sekino (email@example.com) or Alec Berin (firstname.lastname@example.org). We can also be reached toll-free at (866) 540-5505.
Shepherd, Finkelman, Miller & Shah, LLP, is a law firm with offices in California, Connecticut, Florida, New Jersey, New York, Pennsylvania and Wisconsin. SFMS also maintains affiliate offices in London, England, and Milan, Italy, and is an active member of Integrated Advisory Group (www.iaginternational.org), which provides our firm with the ability to provide our clients with access to excellent legal and accounting resources throughout the globe. For more information about our firm, please visit us at www.sfmslaw.com.
Gurrieri, Vin. "NLRB Orders Calif. Grocer to Nix Class Action Waivers." Law360. Last modified on November 25, 2015.