Murphy Oil USA, Inc. v. National Labor Relations Board
2015 U.S. App. LEXIS 18673
| 5th Cir. | 2015Background
- Murphy Oil required employees at its Alabama facility to sign an arbitration agreement (pre-March 2012) requiring individual arbitration of employment claims and waiving class/collective actions; a revised version (post-March 2012) added an express statement that Board charge participation was not precluded.
- Sheila Hobson (and others) filed an FLSA collective action in federal court; Murphy moved to dismiss and compel individual arbitration under the agreement.
- Hobson separately filed an unfair labor practice (ULP) charge with the NLRB alleging the arbitration agreement violated Section 8(a)(1) of the NLRA by interfering with Section 7 rights.
- The NLRB followed its D.R. Horton precedent, found Murphy Oil violated Section 8(a)(1) by requiring individual arbitration and by seeking to enforce the agreements in federal court, and ordered remedial measures (rescission/revision, notice, fees, etc.).
- The Fifth Circuit (following its prior D.R. Horton decision) held: (1) pre-March 2012 agreement could reasonably be read to bar filing NLRB charges and therefore violated Section 8(a)(1); (2) the post-March 2012 Revised Agreement’s explicit carve-out for Board participation made it reasonable to read it as not prohibiting Board charges, so the Board’s order as to the Revised Agreement was not enforced; and (3) Murphy’s motion to compel arbitration (filed before the Board’s D.R. Horton decision) was not a baseless suit in violation of Section 8(a)(1), so the fee award was vacated.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Timeliness/collateral estoppel of Hobson's ULP charge | Hobson timely filed; not precluded by prior district-court rulings | Murphy: charge filed after 6-month statutory period and district court decision precludes NLRB review | Waived by Murphy for failing to press before Board; court does not consider these defenses |
| Legality of class/collective-action waivers in arbitration agreements | NLRB: such waivers unlawfully interfere with Section 7 and chill filing of Board charges | Murphy: FAA governs; waivers of class/collective actions are enforceable | Under Fifth Circuit precedent (D.R. Horton), waivers of class/collective procedures are generally enforceable (court adheres to that ruling) |
| Whether pre-March 2012 Arbitration Agreement unlawfully bars filing NLRB charges | NLRB: broad "any and all claims" language could reasonably be read to bar filing Board charges | Murphy: employees still filed charges, so no chilling effect | Court enforces Board order as to pre-March 2012 agreement — agreement reasonably could be read to bar Board charges and violates NLRA |
| Lawfulness of Revised Arbitration Agreement (post-March 2012) | NLRB: revision insufficient because it left original waiver intact, could still be read to bar Board remedies | Murphy: explicit clause preserves right to participate in Board proceedings; contract read as whole is not ambiguous | Court declines to enforce Board's order as to Revised Agreement — express carve-out makes it unreasonable to read as barring Board charges |
| Filing motion to compel arbitration in district court | NLRB: enforcing unlawful contract and litigating to compel arbitration had an illegal objective and chilled rights; fees warranted | Murphy: motion preceded NLRB D.R. Horton ruling and had a colorable legal basis; not baseless or retaliatory under Bill Johnson’s test | Court rejects fee award; Murphy’s motion was not baseless or filed with illegal objective (filed before Board’s D.R. Horton decision) |
Key Cases Cited
- D.R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir.) (Fifth Circuit holding that class/collective-waiver arbitration provisions are generally enforceable but may be unlawful if reasonably read to bar filing NLRB charges)
- Bill Johnson’s Restaurants, Inc. v. NLRB, 461 U.S. 731 (1983) (employer litigation may be an unfair labor practice if baseless or filed with illegal objective)
- J.I. Case Co. v. NLRB, 321 U.S. 332 (1944) (private contracts must yield where they conflict with NLRB functions)
- Flex Frac Logistics, L.L.C. v. NLRB, 746 F.3d 205 (5th Cir.) (Board’s "chilling effect" test for interference with Section 7 rights)
- Strand Theatre of Shreveport Corp. v. NLRB, 493 F.3d 515 (5th Cir.) (standard of review for NLRB orders)