Employment Law Daily 8th Circuit reiterates that arbitration agreements including waivers of class actions don’t violate NLRA
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Monday, June 6, 2016

8th Circuit reiterates that arbitration agreements including waivers of class actions don’t violate NLRA

By Ronald Miller, J.D. Finding its holding in Owen v. Bristol Care, Inc. fatal to the NLRB’s argument “that a mandatory agreement requiring individual arbitration of work-related claims” violated the NLRA, the Eighth Circuit granted an employer’s petition for review of a Board’s decision that the employer violated Section 8(a)(1) by requiring its employees to enter into an arbitration agreement that included a waiver of class or collective actions in all forums to resolve employment-related disputes. But the appeals court deferred to the Board in finding that the broad language of the arbitration agreement would reasonably be interpreted by employees to limit or preclude their rights to file unfair labor practice charges with the Board (Cellular Sales of Missouri, LLC v. NLRB, June 2, 2016, Wollman, R.). The NLRB found that an employer acted unlawfully by maintaining and enforcing a mandatory arbitration agreement under which employees waived their rights to pursue class or collective action to redress employment-related disputes in any forum. The Board also found that employees would reasonably understand the arbitration agreement to waive or impede their rights to file unfair labor practice charges with the Board. Arbitration agreement. As a condition of employment, the employee entered into an employment agreement that included a provision under which he agreed to arbitrate individually “all claims, disputes, or controversies” related to his employment and to waive any class or collective proceeding. Five months after his employment ended, he filed a putative class action lawsuit alleging that the employer violated the FLSA. The employer moved to dismiss the lawsuit and compel arbitration. The district court concluded that the arbitration agreement—including the class-action waiver—was enforceable. Thereafter, the employee commenced an arbitration proceeding and the parties eventually settled. However, while his lawsuit was pending, the employee filed an unfair labor practice charge with the NLRB, claiming the employer violated his right to engage in protected concerted activity when it required him to sign an arbitration agreement that included a class action waiver. The Board adopted the findings of an administrative law judge who ruled that the arbitration agreement violated the NLRA because of its individual arbitration requirement and because employees would reasonably interpret the arbitration agreement as barring or restricting their rights to file unfair labor practice charges with the Board. Waiver. The Board ordered the employer to either rescind the arbitration agreement or revise it to clarify that, by signing the agreement, employees do not waive their rights to pursue employment-related class or collective actions in all forums and are not restricted in their rights to file charges with the Board. The employer petitioned for review, and the Board cross-applied for enforcement. The Board acknowledged that its position has twice been rejected by the Fifth Circuit, and it conceded that the Eighth Circuit’s holding in Owen v. Bristol Care, Inc. is fatal to its argument “that a mandatory agreement requiring individual arbitration of work-related claims” violated the NLRA. Rather, it sought a hearing en banc and requested that the appeals court reconsider its holding in Owen. However, the Board’s motion was denied. In accordance with Owen, the Eighth Circuit concluded that the employer did not violate section 8(a)(1) by requiring its employees to enter into an arbitration agreement that included a waiver of class or collective actions in all forums to resolve employment-related disputes. Accordingly, the appeals court granted the employer’s petition for review and declined to enforce the Board’s order with respect to this issue. Enforcement of arbitration agreement. Next, the employer argued that the Board erred when it found that the company violated Sec. 8(a)(1) by seeking to enforce the arbitration agreement through a motion to dismiss and compel arbitration in the employee’s putative class-action lawsuit. Because the class-action waiver did not violate Sec. 8(a)(1), the employer’s attempt to enforce the class-action waiver likewise did not violate Sec. 8(a)(1). Accordingly, the appeals court granted the employer’s petition for review and declined to enforce the Board’s order with respect to this issue. It also declined to enforce the Board’s remedies related to this issue. Access to the Board’s processes. The employer also argued that the Board erred when it found that it violated Sec. 8(a)(1) because its employees would reasonably construe the arbitration agreement to bar or restrict their rights to file charges with the Board or seek access to the Board’s processes. Finding that the Board’s construction of the NLRA is “entitled to considerable deference,” the Eighth Circuit denied the employer’s petition for review and enforced the Board’s order with respect to this issue, concluding that Board’s on this issue was reasonable and consistent with the NLRA.

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