Cellular Sales of Missouri, LLC v. National Labor Relations Board
824 F.3d 772
| 8th Cir. | 2016Background
- John Bauer, hired by Cellular Sales in Jan 2012, signed a mandatory arbitration agreement requiring individual arbitration of “all claims, disputes, or controversies” and waiving class/collective actions; his employment ended in May 2012.
- Bauer filed a putative FLSA class action in federal court; Cellular Sales moved to compel arbitration and dismiss; the district court granted the motion; the parties later settled and the case was dismissed with prejudice.
- Bauer also filed an unfair labor practice (ULP) charge with the NLRB alleging the class-action waiver and arbitration terms violated Sections 7 and 8(a)(1) of the NLRA; the NLRB’s ALJ and the Board found multiple violations and ordered remedies (rescission/revision, notices, reimbursements, court notification).
- Key Board findings: (1) class/collective-action waivers in mandatory arbitration can violate § 8(a)(1) by restricting Section 7 rights; (2) arbitration clauses can be reasonably construed to bar filing charges with the Board; (3) enforcing an unlawful provision (motion to compel) independently violates § 8(a)(1); (4) maintenance of such a rule is a continuing violation for § 10(b) timeliness.
- The Eighth Circuit reviewed de novo legal issues and for substantial evidence factual findings; it declined to enforce the Board’s rulings insofar as they condemned class-action waivers and related enforcement, but enforced the Board’s finding that the arbitration clause could reasonably be read to restrict access to the NLRB and rejected the employer’s statute-of-limitations and employee-status challenges.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a mandatory arbitration clause that waives class/collective actions violates § 8(a)(1) by restricting Section 7 substantive rights | Bauer/NLRB: class/collective-action procedures are protected concerted rights; waiver unlawfully restricts Section 7 | Cellular Sales: waiver is enforceable under FAA; class procedure is not a Section 7 substantive right (relying on Owen/D.R. Horton/Murphy Oil conflict) | Court: Waiver does not violate § 8(a)(1); petition granted as to this issue (followed Owen) |
| Whether enforcement action (motion to compel arbitration) constitutes a separate § 8(a)(1) violation | Bauer/NLRB: enforcing an unlawful rule is independently unlawful and fees/notification remedies warranted | Cellular Sales: motion to compel is proper litigation to enforce an agreement; not an NLRA violation if waiver lawful | Court: Because waiver is lawful, enforcement did not violate § 8(a)(1); Board remedies on this point denied |
| Whether the arbitration agreement would reasonably be construed by employees to bar filing ULP charges with the NLRB | Bauer/NLRB: broad, unqualified language (“all claims…shall be decided by arbitration”) would cause employees to reasonably believe Board access is limited | Cellular Sales: no express bar to agency charges; language and references imply only judicial/court forum limits | Held: Agreement is reasonably susceptible to being read to restrict Board access; Board’s finding enforced; corrective relief required for employees still subject to clause |
| Whether Bauer’s ULP charge was time-barred or he was not an “employee” for NLRA purposes | Cellular Sales: charge filed after six months; Bauer no longer an employee during limitations period | Bauer/NLRB: maintenance of unlawful rule is continuing violation within § 10(b); former employees are covered by the NLRA | Held: Charge timely because maintenance is a continuing violation; Bauer qualifies as an “employee”; Board’s determinations upheld |
Key Cases Cited
- NLRB v. Am. Firestop Sols., Inc., 673 F.3d 766 (8th Cir.) (standard of review for Board findings)
- Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013) (arbitration class waivers enforceable in FLSA context; binding precedent in this circuit)
- D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013) (rejected Board’s position that class procedures are a Section 7 substantive right)
- Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015) (declined to treat class waivers as violating NLRA; addressed reasonable-impression issue)
- Cintas Corp. v. NLRB, 482 F.3d 463 (D.C. Cir. 2007) (employer language can be reasonably construed to prohibit Section 7 activity)
- Hoffman Plastic Compounds, Inc. v. NLRB, 535 U.S. 137 (U.S. 2002) (courts need not defer to Board interpretations that trench on other federal statutes/policies)
- St. John's Mercy Health Sys. v. NLRB, 436 F.3d 843 (8th Cir. 2006) (deference to Board constructions of the NLRA if reasonable)
- Allied Chem. & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157 (U.S. 1971) (primary assignment to Board to define contours of “employee” under NLRA)