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June 2 — A provision in a mobile phone salesman's employment contract that requires him to resolve disputes through individual arbitration and precludes class or collective claims doesn't violate his right to engage in concerted activity under the National Labor Relations Act, a federal appeals court ruled ( Cellular Sales of Mo., LLC v. NLRB, 2016 BL 174850, 8th Cir., No. 15-1860, 6/2/16 ).
The National Labor Relations Board asked the U.S. Court of Appeals for the Eighth Circuit to enforce its order that Cellular Sales of Missouri LLC should rescind the arbitration agreement. The board had sided with John Bauer on an unfair labor practice charge he filed over the arbitration requirement.
The June 2 ruling demonstrates why employers should draft arbitration agreements that contain carve-outs for agency actions, John Ho, a management-side attorney at Bond Schoeneck & King PLLC, told Bloomberg BNA. “A general prohibition could be read as to chill filing” an unfair labor practice charge with the NLRB, he said.
The board ruling was “in accordance with” the appeals court's decision in Owen v. Bristol Care, Inc., 702 F.3d 1050, 20 WH Cases2d 24 (8th Cir. 2013), that “arbitration agreements containing class waivers are enforceable,” Judge Roger L. Wollman wrote for the court.
Judges Michael J. Melloy and Steven M. Colloton joined in the opinion.
The Fifth Circuit ruled 2-1 in D.R. Horton, Inc. v. NLRB, 737 F.3d 344, 197 LRRM 2637 (5th Cir. 2013), that mandatory arbitration that prohibits an employee from pursuing class or collective claims doesn't violate the NLRA (233 DLR AA-1, 12/3/13).
But the Seventh Circuit recently sided with the NLRB by saying mandatory arbitration that bars class or collective claims violates an employee's right to engage in concerted activity under the NLRA (102 DLR AA-1, 5/26/16).
At the time, Charlotte Garden, a professor at Seattle University School of Law, said the Seventh Circuit's decision reinvigorated the NLRB's position. “The Eighth Circuit had previously joined with the Fifth,” she told Bloomberg BNA in an e-mail June 2, “so this panel was just following precedent.”
In light of the split among circuit courts, “this is clearly ripe for Supreme Court review,” Ho said.
Chamberlain, Hrdlicka, White, Williams & Aughtry represented Cellular Sales of Missouri. The NLRB general counsel's office represented the board. Both sides didn't immediately respond to requests for comment.
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Text of the opinion is available at http://www.bloomberglaw.com/public/document/Cellular_Sales_of_Missouri_LLC_v_NLRB_Docket_No_1501620_8th_Cir_M.
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