Compelling Individual Arbitration Violates National Labor Relations Act? It Does According To ALJ

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.

In Leslie's Poolmart, Inc. & Keith Cunningham, Case No. 21-CA-102332, the employee ("Cunningham" or Claimant) worked as a retail assistant store manager in Leslie's Poolmart, Inc. ("Leslie's") pool and spa supplies company. Leslie's maintained a "Mutual Agreement to Arbitrate Claims" (the "Agreement") that required employees to resolve certain employment-related disputes exclusively through binding arbitration. The Agreement did not, on its face, limit an employee's employment related claims to individual arbitration. It also did not expressly prohibit an employee's right to assert class wide, collective, or representative actions in an arbitral or judicial forum.

After his separation, Cunningham filed a wage and hour class, collective, and representative action complaint against Leslie's. In response, Leslie's filed a motion to compel arbitration of Cunningham's individual claims and to dismiss his class, collective, and representative action claims on the basis that its arbitration policy was silent as to class-wide arbitrability. See Stolt-Nielson S.A. v. AnimalFeeds Int'l Corp, 130 S. Ct. 1758, 1175 (2010) (class-wide arbitration is forbidden unless the parties have affirmatively and expressly agreed to it).

While Leslie's motion to compel was pending, Plaintiff's counsel filed an unfair labor practice complaint alleging that Leslie's arbitration policy violated Section 8(a)(1) of the National Labor Relations Act ("NLRA"). Relying on the NLRB's decision in D.R. Horton, Inc., 357 NLRB No. 184 (2012), Claimant argued that by moving to compel only individual claims and dismissing all class claims, Leslie's motion to compel had the effect of precluding concerted collective action.

Leslie's responded by arguing, among other things, that the Board lacked jurisdiction when it decided D.R. Horton and thus the decision was invalid based on the ruling in Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013), cert granted, 81 U.S.L.W. 3695 (U.S. June 24, 2013) (No. 12-1281) and that the Board's decision in D.R. Horton is wrongly decided.

In finding a violation of the NLRA, the ALJ...