National Labor Relations Board v. Alternative Entertainment, Inc.
858 F.3d 393
| 6th Cir. | 2017Background
- AEI required employees to sign an “Open Door Policy and Arbitration Program” mandating individual binding arbitration for employment disputes and forbidding class/collective or consolidated claims; AEI’s handbook also forbade unauthorized disclosure of compensation information.
- Field technician James DeCommer (a POV technician) complained that a proposed change from per-unit vehicle compensation to mileage-based pay would cut POVs’ pay ≈20%; he discussed the issue with coworkers, emailed management and met with management about it.
- AEI manager Robinson told DeCommer not to discuss the pay change with other technicians and to direct concerns to management; DeCommer continued to discuss it and was discharged on December 18, 2014.
- The NLRB found AEI violated Sections 7 and 8 of the NLRA by (1) maintaining the arbitration clause barring collective/class claims; (2) maintaining a rule forbidding discussion of compensation; and (3) disciplining/firing DeCommer for protected concerted activity. The NLRB’s order was appealed to the Sixth Circuit.
- The Sixth Circuit reviewed factual findings for substantial evidence and legal conclusions de novo (with Chevron deference to reasonable NLRB interpretations of the NLRA), and enforced the NLRB order in full.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether AEI’s arbitration provision that bars class/collective actions violates the NLRA and is unenforceable under the FAA’s saving clause | NLRB: The clause unlawfully restrains §7 concerted activity (collective legal action) and thus is illegal; FAA’s saving clause preserves non-enforcement where contract violates generally applicable law | AEI: FAA mandates enforcement of arbitration agreements; NLRA doesn’t trump FAA; Concepcion/Italian Colors/Gilmer require enforcement | Held: Clause violates NLRA (interferes with §7 substantive right to concerted legal action) and falls within FAA §2 saving clause; unenforceable |
| Whether AEI’s handbook rule forbidding disclosure of compensation unlawfully interferes with §7 rights | NLRB: blanket confidentiality rule unlawfully restricts employees’ discussion of wages and terms | AEI: did not except to this finding in brief (no sustaining defense raised) | Held: Rule is facially invalid as an unlawful restraint on Section 7; enforced summarily |
| Whether Robinson forbade DeCommer from discussing compensation with coworkers | NLRB/ALJ: Credible testimony shows Robinson told DeCommer not to discuss pay and to direct concerns to managers | AEI: DeCommer’s memory was uncertain; credibility should be discounted | Held: ALJ credibility finding reasonable and supported; NLRB finding affirmed |
| Whether DeCommer’s discharge was unlawful retaliation for protected concerted activity | GC: DeCommer engaged in concerted activity (spoke with coworkers, complained to management); this was a motivating factor; AEI’s performance-based reason was pretextual | AEI: DeCommer acted from purely personal motive; he was fired for poor smart-home sales and insubordination | Held: Substantial evidence supports NLRB that DeCommer engaged in protected concerted activity and that AEI’s proffered reasons were pretextual; termination unlawful |
Key Cases Cited
- Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967) (FAA makes arbitration agreements as enforceable as other contracts, but not more so)
- Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614 (1985) (arbitration may be an adequate forum for statutory claims)
- National Licorice Co. v. NLRB, 309 U.S. 350 (1940) (contracts renouncing NLRA rights are unlawful and unenforceable)
- Eastex, Inc. v. NLRB, 437 U.S. 556 (1978) (concerted activity includes resort to administrative and judicial forums)
- NLRB v. City Disposal Sys., Inc., 465 U.S. 822 (1984) (§7 protects employees banding together to improve terms and conditions)
- Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20 (1991) (agreeing to arbitrate a statutory claim submits its resolution to arbitration but does not forgo substantive rights)
- AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011) (FAA preempts state rules that effectively bar arbitration by disfavoring it)
- American Express Co. v. Italian Colors Restaurant, 570 U.S. 228 (2013) (arbitration agreement may be enforceable despite raising practical difficulties for vindicating statutory rights)