In August of 2016, we reported that the Ninth Circuit created a deeper circuit-split on whether class action waivers in arbitration agreements violate the National Labor Relations Act (“NLRA”) with its decision in Morris v. Ernst & Young LLP.
As expected, the Supreme Court granted review today of three of the conflicting Court of Appeals decisions. It granted review of the Fifth Circuit’s decision in Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015). The Fifth Circuit rejected the National Labor Relations Board’s (“NLRB”) position that class action waivers unlawfully interfere with employees’ NLRA rights to engage in concerted activity, agreeing with the Second and Eighth Circuits. The Ninth and Seventh Circuits, on the other hand, adopted the NLRB’s position that class action waivers violate the NLRA.
The Supreme Court also granted review in Morris v. Ernst & Young, 834 F.3d 975 (9th Cir. 2016) and Epic Systems Corp. v. Lewis, 823 F.3d 1147 (7th Cir. 2016). The Seventh Circuit held that an arbitration agreement precluding collective arbitration or collective action violates section 7 of the NLRA and is unenforceable under the FAA. The Ninth Circuit agreed and concluded that compulsory class action waivers violate sections 7 and 8 of the NLRA by limiting workers’ rights to act collectively, noting in footnote 4 that agreements containing an “opt-out” clause for pursuing class claims do not violate the NLRA.
All three cases have been consolidated and will be argued together.
Can employers still require employees to sign arbitration agreements with class action waivers as a condition of employment? Last week, the Ninth Circuit became the second appellate court to adopt the National Labor Relations Board’s (“NLRB”) position that class action waivers violate the National Labor Relations Act (“NLRA”) in Morris v. Ernst & Young LLP.
On May 26, the U.S. Court of Appeals for the Seventh Circuit held that a wage-and-hour class arbitration clause violated the National Labor Relations Act (NLRA), setting up a circuit split with the Fifth Circuit, and opening the door for the U.S. Supreme Court to weigh in on arbitration clauses in employment agreements containing class action waivers.
In its June 26 split decision in American Baptist Homes of the West d/b/a Piedmont Gardens and Service Employees International Union, United Healthcare Workers- West, 362 N.L.R.B. No. 139 (Case No. 32-CA-063475) (“Piedmont Gardens”), the National Labor Relations Board (“NLRB” or “Board”) adopted a new standard for union access to employers’ witness statements in discipline cases. In so doing, the NLRB overruled the 37-year-old standard articulated in Anheuser- Busch, 237 NLRB 982 (1978), that provided a blanket exemption for the disclosure of witness statements. Instead of a blanket rule, the majority followed the Supreme Court’s 1979 decision in Detroit Edison v. NLRB, 440 U.S. 301 (1979), which requires a case-by-case balancing of the union’s need for the witness statements against the employer’s “legitimate and substantial confidentiality interests.”
The National Labor Relations Board’s (“NLRB”) General Counsel’s Office has again signaled its commitment to expanding the scope of the current test for joint employment. In a move that could have implications for a broad array of franchise relationships, on December 19, 2014, the General Counsel of the NLRB announced that it has issued complaints against both McDonald’s franchisees and McDonald’s USA, the franchisor, as a joint employer. The decision to name McDonald’s as a respondent is consistent with the General Counsel’s recent advocacy that the current joint employment standard is too narrow.
In a game-changing 3-2 decision on December 11, the National Labor Relations Board (NLRB or Board) overruled its 2007 Register Guard decision, which upheld the right of employers to limit employee access to company email systems, calling it “clearly incorrect” and holding that employees have a presumptive right to use their employers’ email systems for non-business purposes, like communications about union organizing, wages and working conditions, during “nonworking time.” Register Guard, which has long been criticized by organized labor, held that an employer may completely prohibit employees from using an employer’s email system for Section 7 purposes, even if they are otherwise permitted access to the email system—without demonstrating any business justification—so long as the ban is not applied discriminatorily.
Ever since the U.S. Supreme Court issued its decision in AT&T Mobility LLC v. Concepcion, California employers hoped this day would come. In a predictable result, the California Supreme Court today acknowledged that class action waivers in employment arbitration agreements are enforceable under the Federal Arbitration Act (FAA). In so doing, the Court overruled its 2007 decision in Gentry v. Superior Court which effectively had barred class action waivers for wage and hour cases. But the Court’s 6-1 plurality decision also bolstered an alternate method for bringing Labor Code claims in court by declaring that actions brought under the Private Attorneys General Act (Labor Code § 2968 et seq.) are not waivable by private agreement and thus not subject to compelled arbitration. READ MORE
Joining the ever growing list of opinions on the arbitrability of class claims, an NLRB Administrative Law Judge recently ruled that an arbitration agreement that did not expressly bar workers from bringing class or collective actions still violated federal labor law because the employer’s steps taken to enforce the agreement in court had the practical effect of doing so. READ MORE
The Miami Dolphins recently have come under intense scrutiny amid allegations that coaches encouraged defensive guard Richie Icognito to bully teammate Jonathan Martin in an effort to “toughen” him up. The alleged bullying was so severe, including threats of violence and racially derogatory statements, that Martin left the team, the NFL launched an investigation, and the Dolphins suspended Incognito indefinitely. While it may have taken this locker room scandal to bring bullying into the public eye, the legal and practical ramifications of workplace bullying are common, and employers can learn many lessons from this case. READ MORE
With the increasing prominence of social media, employers have been rightfully concerned about the impact of employees’ out-of-work statements on the work place—particularly when it comes to the reputation of the employer. In the last few years, the National Labor Relations Board has held that even offensive language can be protected concerted activity [See previous Orrick blog postings on this topic from September 25, 2012 and May 16, 2013]. However, apparently there is a limit: an administrative law judge held last week that the expletive-laden Facebook posts of two youth center employees crossed a line. READ MORE