659 F. App'x 40
2d Cir.2016Background
- Raymours requires employees, as a condition of employment, to sign an Employment Arbitration Program (EAP) that mandates individual arbitration of all employment and compensation-related claims and includes a class/collective-action waiver.
- The EAP expressly permits employees to file EEOC or similar administrative charges and does not require waiver of NLRA rights to file unfair labor practice charges.
- Connie Patterson (and opt-in plaintiff David Ambrose) sued Raymours asserting FLSA and New York Labor Law collective/class claims; Raymours moved to compel arbitration under the EAP.
- The district court granted the motion and enforced the EAP’s class/collective-action waiver, rejecting the argument that the waiver violated employees’ NLRA and Norris-La Guardia Act rights.
- On appeal the sole question was whether the EAP’s ban on collective adjudication unlawfully restricted NLRA/NLGA rights such that the FAA’s mandate to enforce arbitration agreements must yield.
- The Second Circuit affirmed, holding itself bound by its prior decision in Sutherland v. Ernst & Young LLP and rejecting appellants’ arguments.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a waiver of collective/class adjudication in an arbitration agreement violates the NLRA/NLGA | Patterson: the waiver unlawfully restricts employees’ Section 7 NLRA rights and conflicts with the NLGA, so it is unenforceable | Raymours: waiver is a valid contractual term; FAA requires enforcement of arbitration agreements as written | Waiver does not violate NLRA/NLGA as a matter of Second Circuit precedent; enforcement affirmed |
| Whether the FAA’s enforcement mandate yields when an arbitration clause waives collective remedies protected by federal labor law | Patterson: an arbitration clause that waives concerted rights is illegal and falls within the FAA’s saving clause, so it is not enforceable | Raymours: FAA requires enforcement; parties agreed to arbitrate individually | Court enforces arbitration under FAA, applying Sutherland and declining to adopt NLRB’s contrary view |
| Whether this Court is bound by Sutherland despite later NLRB decisions refining arguments | Patterson: Sutherland is distinguishable or undermined by subsequent NLRB decisions | Raymours: Sutherland is controlling precedent and must be followed unless overruled en banc or by Supreme Court | Court holds Sutherland controls and panel must follow it |
| Whether any other arguments (procedural or statutory) preclude enforcement of the EAP | Patterson: alternative remedies or forum-preservation required (e.g., permit class arbitration or waive arbitration for collective claims) | Raymours: no basis to carve out collective claims from arbitration; EAP is enforceable as written | Court rejects remaining arguments and affirms district court |
Key Cases Cited
- Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013) (Second Circuit precedent rejecting NLRB’s position that collective-waivers violate the NLRA)
- D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344 (5th Cir. 2013) (Fifth Circuit rejecting Board’s conclusion that class/collective waivers violate NLRA)
- Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013 (5th Cir. 2015) (Fifth Circuit reaffirming rejection of NLRB’s position)
- Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013) (Eighth Circuit position aligned with Sutherland/Owen line rejecting NLRB)
- Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016) (Seventh Circuit holding collective-waivers unlawful under NLRA and unenforceable under the FAA)