Another Day Another NLRB Decision Invalidating Arbitration Agreements

An NLRB Administrative Law Judge issued a decision against a Domino’s franchisee for violating the National Labor Relations Act. The franchisee required employees, as a condition of employment, to agree to pursue legal disputes with the restaurant owners in binding arbitration on an individual basis. Thus, the employees waived their rights to pursue class and collective legal action. We all know how this works out for the employer….

The primary question in this case was whether the company’s arbitration agreement violated the NLRA. The agreement clearly and expressly barred employees from exercising their right to pursue collective employment claims in all forums. Administrative Judge Tafe concluded that, although circuit courts generally disagree, she must apply the Board’s rationale in D.R. Horton and Murphy Oil USA to the instant case. She summarized her decision as follows:

Having found that Respondent engaged in unfair labor practices, I shall order it to cease and desist from such conduct and to take certain affirmative actions designed to effectuate the policies of the Act.

She continued that the employer must either rescind or revise the policy or make clear to employees that the arbitration agreement does not preclude them from pursuing collective actions or filing charges with the NLRB. Oh yeah, the employer must also reimburse the plaintiff for attorneys’ fees related to his opposition of the franchisee company’s request that his lawsuit be sent to arbitration.

Matt Austin owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

Uber’s Deal with NYC Union Bides Time Before Union Organizing Commences

Uber probably just considers this the cost of doing business in NYC.

Uber drivers have expressed frustration over the appeal process for deactivated accounts. Now, with assistance provided by the International Association of Machinists union (IAM), the 40,000 Uber drivers in New York City can take their cases to arbitration with a group called the Independent Drivers Guild (IDG) which Uber funds.

The drivers did not vote for the IDG nor does IDG represent them in collective bargaining, and the drivers pay no dues to the organization. Additionally, the IDG has agreed that it will not attempt to organize drivers while the current agreement is in place (until 2021) nor attempt to get the drivers to reclassify as employees (Uber classifies them as independent contractors).

Hold on. First, this appears to only stop the IAM from trying to organize Uber drivers. Perhaps the agreement extends to all members of the AFL-CIO. But big name unions like the Teamsters, Steelworkers, UAW, and SEIU are not part of the AFL-CIO. Could the costs associated with the IDG be for naught if one of the other unions successfully organized a micro-unit of drivers?

Secondly, despite agreeing to not organize the drivers until 2021 (unless another, probably more union-friendly agreement is inked) the IAM actually has a 5-year head start in organizing. It’s the IAM who negotiated the for the IDG. It’s the IAM who negotiated that Uber fully funds the program. It’s the IAM who negotiate that drivers have a right to arbitration if they are dissatisfied with the deactivation of their accounts.

Thirdly, this may be end up being a bad business deal for the IAM, much like the Fight for $15 campaigns have been for other unions. Both organizing philosophies rest on the notion that the union can achieve for workers what workers cannot achieve without the union. But in the end, workers are not willing to join the union or pay the union for its achievements. Fight for $15 has not generated unionized workers in the fast food industry despite spending hundreds of millions of dues-dollars. Post 2021 will Uber workers want to join the IAM and pay membership dues for what they are currently getting for free? We’ll have to wait and see. But the adage, why by the cow when the milk is free seems appropriate at this time.

Matt Austin who owns Austin Legal, LLC, a boutique law firm based in Ohio that limits its representation to employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 285-5342 or email him at Matt@MattAustinLaborLaw.com.

NLRB Carve Out to Arbitration Clause Not Adequate, says Board

By now, most companies know that the National Labor Relations Board frowns upon mandatory arbitration agreements, even voluntarily entered into ones, and now even ones that permit employees to file charges with the Board. Specifically, an Administrative Law Judge found that the company acted unlawfully in making it “reasonably clear” that individual employees could file NLRB charges because the company’s “exclusions and restrictions” language confused, rather than clarified, the rights of employees to file unfair labor practice charges with the Board.

The policy language provided, “Any non-waivable statutory claims, which may include wage claims within the jurisdiction of a local or state labor commission or administrative agency, charges before the EEOC, NLRB, or similar local or state agencies, are not subject to exclusive review by arbitration.” According to the Board, the company’s suggestion that it “may” exempt the filing of Board charges is misleading in that it implies that some claims that are cognizable under Board law may nevertheless be subject to arbitration under the Employer’s policy.

Now I’m confused in trying to figure out how a plain language reading of the policy that permits the filing of Board charges was confusing to the Board.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Applebee’s Class Action Ban Latest to be Ruled Unlawful by National Labor Relations Board

Since arbitration helps companies avoid the high costs associated with litigation, companies often have employees enter into agreements to arbitrate disputes rather than take them to court.

Workers at Applebee’s restaurants in Pennsylvania, New Jersey, Maryland, and Delaware typically sign an arbitration agreement that includes a term prohibiting employees from becoming members of a class action. The National Labor Relations Board recently ruled that this arbitration agreement violates federal labor law.

The Board recently reversed its position on class action waivers in arbitration agreements. Such waivers used to be permissible. Now, though, arbitration agreements that preclude workers from joining a class action are unlawful. Unsurprisingly, Applebee’s counsel argued that the NLRB should follow federal court cases that permit these waivers. However, the Administrative Law Judge who heard the case disagreed stating that NLRB judges must follow NLRB law unless it has been reversed by the United States Supreme Court.

The state of law related to arbitration agreements is evolving, and it is possible that the Supreme Court will make a final determination of the legality of arbitration agreements. Until then, employers need to be cautious about arbitration agreements that preclude class actions.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Complaining of Secondhand Pot Smoke: Protected Concerted Activity or Terminable Offense?

A carpenter hired by Circus Circus Casinos in Las Vegas to work on guest rooms complained during a safety meeting that workers were exposed to secondhand marijuana smoke while performing work in rooms and he was concerned that this exposure could cause a positive drug test. The carpenter was later discharged for another reason and filed an unfair labor practice charge over the discharge, alleging that the discharge was because of his concern about secondhand pot smoke. Let us suspend our cynicism that the carpenter is really just preemptively defending why he will fail a test in the future because of his own recreational drug use.

The Administrative Law Judge determined that the comment was protected concerted activity. The comment was raised during a safety meeting and another employee tangentially concurred that he, too, was concerned. The questioning carpenter agreed to take a drug test “on the spot” to prove his concern was for secondhand smoke instead of his own drug use. The decision to terminate the employee for refusing to be fitted for a respirator mask (which would prevent him from inhaling secondhand smoke) was, according to the ALJ, pretextual, and the employee was reinstated to his previous job and awarded back pay.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Arbitrator Re-Writes Union Contract to Make Certain Employees Eligible for a Bonus

Seven different unions were negotiating a collective bargaining agreement with a single employer. While bargaining for the 2011 agreement, everyone agreed to exclude newly hired workers from an established pension plan, but did not discuss the “Copper Price Bonus” or workers’ eligibility for it. The bonus was kept in place in the 2011 version of the agreement. After the agreement was ratified, an HR manager “became aware that there could be an issue with eligibility for the Copper Price Bonus for new hires…because of the link between receiving the Copper Price Bonus and eligibility for the pension plan.” The HR manager “was concerned that this might be a problem for new hires since they were no longer eligible for the pension plan.” Ultimately, the company announced that workers hired after July 1, 2011, would not be eligible for the quarterly bonus; the unions grieved this decision.

According to the arbitrator, the unions and the employer made a mutual mistake during negotiations by “failing to change the bonus eligibility language to ensure that new hires remained eligible for the bonus” and that neither party made an effort during bargaining to change the eligibility requirements for the bonus despite doing so for the pension. Further, “there was no evidence that by removing new hires from participation in the pension plan that the new hires would then also not be eligible for participation in the Copper Price Bonus.” This ruling was made despite the Company’s objection and argument that no mistake existed and even if one did exist, the arbitrator lacked authority “to rewrite the contract to make new hires eligible for the bonus.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.

Oil Company Latest to Lose Arbitration Agreement Enforcement from NLRB

Relying on the controversial D.R. Horton case, the NLRB ruled that gas station chain Murphy Oil’s arbitration agreements barring employees from pursuing class actions were unlawful. Three pro-Union Board Members ruled that the gas station violated the law by requiring employees to resolve employment claims in individual arbitration and seeking to enforce its agreements in court after a former employee filed a wage and hour lawsuit in court. As a reminder, D.R. Horton holds that arbitration agreements that are signed as a condition of employment and preclude workers from bringing joint, class, or collective claims over working conditions, are unlawful.

A scathing dissent from a pro-Company Board Member states, “with this decision, the majority effectively ignores nearly 40 Federal and State courts that, directly or indirectly, all recognize the flaws of the Board’s use of a strained, tautological reading of the National Labor Relations Act in order to both override the Federal Arbitration Act and ignore the commands of other federal statutes. This decision continues the cat and mouse game of the NLRB consistently invalidating arbitration agreements and forcing companies to appeal to the federal court system to enforce the agreements. I fully expect Murphy Oil to succeed on appeal and the plaintiff to be forced to withdraw her complaint in court and subject herself to the confines of the arbitration agreement.

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.