NLRB Can Subpoena Night Club Records to Investigate Policies

Daily Labor Report® is the objective resource the nation’s foremost labor and employment professionals read and rely on, providing reliable, analytical coverage of top labor and employment...

By Lawrence E. Dubé

Aug. 15 — The National Labor Relations Board can subpoena “entertainer agreements” signed by exotic dancers and handbooks covering night club employees to aid its investigation of a challenge to a mandatory arbitration policy, a federal district court in North Carolina held ( NLRB v. Raleigh Rest. Concepts, Inc. , 2016 BL 261866, E.D.N.C., No. 5:15-cv-438-D, 8/12/16 ).

While the employer asserted potential defenses to an unfair labor practice charge, the decision indicates courts are reluctant to block the NLRB from obtaining information through investigative subpoenas.

Raleigh Restaurant Concepts Inc. argued the complaining dancer was an independent contractor, the arbitration policy was lawful and the information sought was irrelevant to the dancer's claim. Judge James C. Dever of the U.S. District Court for the Eastern District of North Carolina Aug. 12 rejected those arguments and enforced the NLRB subpoena.

Dever said the NLRB has jurisdiction to investigate those matters and to subpoena relevant information.

NLRB Charge Targets Class Action Waiver

Leslie Holden filed a class and collective action alleging the employer misclassified her and other workers as independent contractors and underpaid them in violation of the Fair Labor Standards Act and the North Carolina Wage and Hour Act.

The Eastern District of North Carolina ordered Holden to arbitrate her claims under an agreement she had signed with Raleigh Restaurant.

Holden filed an unfair labor practice charge with the NLRB arguing the company's arbitration agreement and class or collective action waiver was unlawful because it prevented employees from engaging in concerted activity for their mutual aid or protection.

In April 2015, the NLRB subpoenaed documents, which the employer refused to produce. The disputed documents included company handbooks and personnel policies that applied to all personnel, as well as “entertainer leases” or agreements signed by the company's alleged independent contractors.

Raleigh Restaurant filed a petition to revoke the subpoena, which the NLRB denied.

The board then filed a petition to enforce the subpoena, which the court granted.

Court Finds Information Demands Proper

Quoting from NLRB v. Interbake Foods, LLC, 637 F.2d 492, 190 LRRM 2269 (4th Cir. 2011), Dever said the role of a court is to determine whether an NLRB subpoena “is within the authority of the agency, the demand is not too indefinite, and the information sought is reasonably relevant.”

Raleigh Restaurant argued Holden was an independent contractor outside the protection of the NLRA, but the court said it was up to the NLRB to interpret the act and resolve that issue. It also said a challenge to the company's class action waiver was at least plausible because the U.S. Court of Appeals for the Fourth Circuit has not yet ruled on the issue, and other courts have split on the question.

Finally, the court said that the employee handbooks and entertainer leases sought by the NLRB are relevant to its inquiry into the alleged maintenance of an unlawful arbitration policy and that “the identities of members of the putative victim class are reasonably relevant to the charge.”

NLRB attorneys represented the board. Jackson Lewis PC represented Raleigh Restaurant Concepts Inc.

To contact the reporter on this story: Lawrence E. Dubé in Washington at ldube@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.