A National Labor Relations Board administrative law judge found that an employer violated Section 8(a)(1) of the National Labor Relations Act by: 1) requiring applicants to waive their right to bring class claims, and 2) opposing an employee's class and collective allegations based upon that waiver.
In Convergys Corporation, NLRB Case Nos. 14-CA-075249 (Oct. 25, 2012), the charging party completed and submitted an employment application with the employer in which she waived the right to a jury trial, any statute of limitations longer than six months, and the right to "lead, join, or serve as a member of a class or group of persons bringing such a claim or lawsuit." Six months after she was hired, the charging party, individually and on behalf of similarly situated employees, filed a lawsuit against the employer alleging violations of the Fair Labor Standards Act. In response, the employer filed a motion to strike the class and collective allegations in the lawsuit based on the waiver the employee signed in her employment application.
The Acting General Counsel alleged that the employer violated Section 8(a)(1) of the Act by requiring job applicants to waive their rights to file collective lawsuits, by enforcing those waivers by filing the motion to strike the class and collective allegations of the employee's lawsuit, and defending against the class and collective allegations of the employee's lawsuit on the basis of the waiver she signed. Recognizing that he was bound by recent Board precedent, the administrative law judge agreed with the Acting General Counsel:
The parties appear to recognize that I am bound by the Board’s decision in D. R. Horton, Inc., 357 NLRB No. 184 (2012), which is pending before the United States Court of Appeals for the Fifth Circuit. Respondent submits that the Board wrongly decided that case. However, unless it is materially distinguishable from the instant case, I am bound to conclude that Respondent violated the Act as alleged.
In D.R. Horton, the Board held that, “employers may not compel employees to waive their NLRA right to collectively pursue litigation of employment claims in all forums, arbitral and judicial,” (slip opinion page 12 and 13). Thus, despite the fact that the D.R. Horton decision concerned a mandatory arbitration agreement, rather than a lawsuit which waived the employees’ rights to maintain a class or collective action, it is clearly dispositive of this case. Indeed, the Board’s order specifically requires D.R. Horton to cease and desist from “maintaining a mandatory arbitration agreement that waives the right to maintain class or collective actions in all forums, whether arbitral or judicial.”
The employer argued that the case was distinguishable from D.R. Horton because the charging party was an applicant, not an employee, at the time she signed the waiver, and that an employer does not violate the Act by seeking dismissal of the class action suit on the basis of such a waiver. The judge disagreed.
As the judge correctly pointed out, "[a]pplicants for employment are employees within the meaning of section 2(3) of the NLRA," and "[m]oreover, [the employee] was working for Respondent when she exercised the right found by the Board in D.R. Horton to file a class action lawsuit." The judge similarly rejected the employer's argument that an employer cannot violate the Act by opposing a plaintiff's motion for class certification. The judge reads D.R. Horton:
as standing for the proposition that an employer remains free to assert arguments against certification other than those based on the kind of waiver Respondent required of job applicants in this case.
While this decision is another example of the NLRB's application of D.R. Horton, most courts continue to ignore D.R. Horton in upholding class claim waivers. As noted by the ALJ in Convergys, D.R. Horton is on appeal, so hopefully we will have more guidance regarding the legitimacy of class claim waivers in the next few months.