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Latest News - October 2014

October 20, 2014
NLRB Judges Knock 2 Employers' Arbitration Pacts
By: Scott Flaherty

Law360, New York (October 20, 2014, 7:14 PM ET) -- A California grocery chain and a Las Vegas limousine service were faulted Friday by National Labor Relations Board judges who found the employers violated federal labor law by requiring employees to sign arbitration agreements that interfered with their right to bring collective actions.

In separate rulings applying the NLRB's D.R. Horton precedent — which concluded that it is a violation of federal labor law to make employees sign an arbitration agreement that, in turn, prevents them from bringing class or collective claims — administrative law judges for the NLRB found against Bristol Farms, an upscale grocery chain in California, and AWG Ambassador LLC, which provides limousines, private tours, airport shuttles and other car services in Las Vegas.

The NLRB judges, Judge Lisa D. Thompson in the Bristol case and Judge Eleanor Laws in the AWG case, determined that the employers violated the National Labor Relations Act by subjecting employees to arbitration agreements that interfered with their rights to concerted action under Section 7 of the NLRA.

“Respondent violated … the act by maintaining mutual agreement to arbitrate that employees reasonably would believe bars or restricts their right to file charges with the National Labor Relations Board,” Judge Thompson said in the Bristol case.

The Bristol decision came in an unfair labor practices case brought against the grocery chain by Konny Renteria, who had worked in Carson, California, and, in August 2012, filed a putative class action in California state court, alleging various wage violations. After the company sought to compel arbitration in that suit, based on an agreement Renteria had signed as a Bristol employee, the state court sent the matter to arbitration and dismissed the class claims. The worker later turned to the NLRB.

In the NLRB proceedings, Bristol argued, among other things, that the board's 2012 decision in D.R. Horton didn't apply to the arbitration pact that Renteria had signed. Unlike the agreement at issue in D.R. Horton, the Bristol agreement did not contain an explicit provision requiring employees to waive their class or collective action rights, the company said.

But in Friday's ruling, Judge Thompson said, regardless of whether Bristol's arbitration pact contained an express class action waiver, the company had “clearly” applied the arbitration agreement “to restrict [Renteria] from proceeding with a class action complaint.”

“Respondent’s attempt to have it both ways is disingenuous,” the judge said.

In the AWG case, the limousine service had its employees sign an arbitration agreement that did contain an explicit class action waiver, and as a result, Judge Laws said the agreement violated the NLRA under the precedent the board set in D.R. Horton.

“[AWG] argues that D.R. Horton was wrongly decided and has been widely rejected. Essentially, the respondent argues it should be overruled,” Judge Laws said in the AWG ruling. “Any arguments regarding the legal integrity of board precedent, however, are properly addressed to the board.”

In both cases, the employers were ordered to rescind or revise their employee arbitration agreements, and notify employees of those actions, according to the rulings.

The board's rationale in D.R. Horton has since been challenged in court. In December, theFifth Circuit rejected the conclusion that class action waivers in mandatory arbitration agreements violated federal labor law. The appeals court found that the board's decision did not give enough weight to the Federal Arbitration Act and that the NLRA does not “contain a congressional command overriding application of the FAA.”

Attorneys for Bristol and AWG did not immediately respond on Monday evening to requests for comment regarding the NLRB judges' rulings.

Bristol is represented by Denica E. Anderson and Kimberly M. Talley of Sanchez & Amador LLP.

Renteria is represented by Matthew W. Gordon of Mattern Law Group.

AWG is represented by Roger L. Grandgenett and Ethan D. Thomas of Littler Mendelson PC.

The cases are Bristol Farms and Konny Renteria, case number 21-CA-103030, and AWG Ambassador LLC and Steven Stroh, case number 28-CA-118801, both before the National Labor Relations Board.

--Editing by Mark Lebetkin.



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