ORDER
In its March Order, Document No. 57, the Court left open the issues raised by In re D.R. Horton, Inc., 357 N.L.R.B. No. 184 (3 Jan. 2012). The Court has continued to study the parties’ briefs and the cases. The question is whether, in light of Horton, the parties’ class-action waiver is enforceable.
1. Severability. The Court made a mistake about severability in its March Order. Document No. 57, at 10. First, immediately after the bold-faced sentence prohibiting class or collective proceedings, the parties’ agreement says this: “Notwithstanding any other clause contained in this Agreement, thе preceding sentence shall not be severable from this Agreement in any case in which the dispute to be arbitrated is brought as a class, collective or representative action.” Document No. 57, at 15. The Court missed the agreement’s you-can’t-sever-this provision.
Moreover, the general severability clause, on which the Court relied, has a deeper legal meaning than the Court discerned. “In the event any portion of this Agreement is deemed unenforceable, the remainder of this Agreement will be enforceable. If the Class Action Waiver is deemed to be unenforceable, the Company and the Employee agree that this Agreement is otherwise silent as to any party’s ability to bring a class, collective or representative action in arbitration.” Document No. 57, at 15. The parties’ fail-back position — agreed silence — means they madе no agreement to have a class or collective action in arbitration. Stolt-Nielsen S.A. v.
2. Jurisdiction. Securitas pauses on jurisdiction. Rightly so. The Court agrees that it has jurisdiction to consider and decide the National Labor Relations Act issue raised by Delock’s argument from the Horton decision. This is a collateral issue in Delock’s lawsuit alleging that Securitas violated the Fair Labor Standards Act. Connell Constr. Co. v. Plumbers and Steamfitters Local Union No. 100,
3. Horton. Until recently, it seemed settled law that an employee’s statutory right to pursue a wage claim as part of a collective action, 29 U.S.C. § 216(b), could be waived in favor of individual arbitration. The Courts of Appeals that had considered this issue had so held. Coley v. Gulf-stream Aerospace Corp.,
In Gilmer v. Interstate/Johnson Lane Corp., for example, the Court upheld an agreement that sent an age-discrimination claim to arbitration.
More recent decisions, in a variety of contexts, confirm the Supreme Court’s solicitude for arbitration on whatever terms the parties have agreed. In 11 Penn Plaza LLC v. Pyett, the Court enforced a collective bargaining agreement provision requiring arbitration of age-discrimination claims.
Then came Horton. It began as a dispute alleging misclassification under the Fair Labor Standards Act. The employee and the employer had an agreement requiring arbitration on an individual basis of аll employment-related disputes and barring collective proceedings. After the company refused to recognize a notice of collective arbitration, the employee filed a charge with the National Labor Relations Board. The employee prevailed. The National Labor Relations Act protects employees’ right “to engage in ... concerted activities for the purpose of collective bargaining or other mutual aid or protection[.]” 29 U.S.C. § 157. Proceeding collectively, either in court or in arbitration, the Board concluded, is concerted activity. Therefore, “employers may not compel employees to waive their NLRA right to collectively pursue litigation of employment claims in all forums, arbitral and judicial.” 357 N.L.R.B. No. 184, at *16 (emphasis original).
The two sitting NLRB members concluded that no conflict existed between the National Labor Relations Act and the Federal Arbitration Act in these circumstances. 357 N.L.R.B. No. 184, at *10-*16. First, there was no equal-footing problem because the NLRA regulates many employee/employer agreements, not just arbitration agreements. Cf. Concepcion, — U.S. at-,
The company has petitioned the Fifth Circuit for review of the Board’s decision. D.R. Horton, Inc. v. National Labor Relations Board, No. 12-60031 (5th Cir. filed 13 January 2012). The case is in mid-briefing. No Court of Appeals has yet spoken on the matter. The District Courts have divided. Compare, e.g., Jasso v. Money Mart Express, Inc.,
The Board’s construction of the National Labor Relations Act “is entitled to considerable deference and must be upheld if it is reasonable and consistent with the policies of the Act.” St. John’s Mercy Health Systems v. N.L.R.B.,
The Federal Arbitration Act’s core provision speaks in broad terms.
A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract.
9 U.S.C. § 2. This and companion provisions “manifest a liberal federal pоlicy favoring arbitration agreements.” Gilmer,
If the competing statute was the Fair Labor Standards Act, the Fifth Circuit’s persuasive decision in Carter would undermine Delock’s attack on the arbitration agreement. First, FLSA claims are subject to arbitration. Nothing in the FLSA’s text or legislative history indicates that Congress excepted those claims from the FAA’s mandate.
[W]e reject the Carter Appellants’ claim that their inability to proceed collectively deprives them of substantive rights available under the FLSA. The Supreme Court rejected similar arguments concerning the ADEA in Gilmer, despite the fact that the ADEA, like the FLSA, explicitly provides for class action suits.500 U.S. at 32 ,111 S.Ct. 1647 . What is more, the provision for class actions in the ADEA is the FLSA class action provision, which the ADEA expressly adopts. 29 U.S.C. § 626(b). Accordingly, Gilmer’s conclusion in this respect applies with equal force to FLSA claims.
Carter,
But the contrary congressional command Delock asserts is in the National Labor Relations Act, not the FLSA. It is the other-concerted-activities part of the NLRA’s § 7.
§ 157. Right of employees аs to organization, collective bargaining, etc.
Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of then-own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all of such aсtivities except to the extent*789 that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title.
29 U.S.C. § 157 (emphasis added). When employees band together to assert FLSA claims, the Board concluded in Horton, they are pursuing concerted activities for mutual aid and protection, which the NLRA protects. 357 N.L.R.B. No. 184, at *1.
This conclusion is a reasonable reading of the statute. And it is consistent with settled law. As the Eighth Circuit recently observed, “a lawsuit filed in good faith by a group of employees to achieve more favorable terms or conditions of employment is ‘concerted activity’ under § 7 of the National Labor Relations Act.” Brady v. National Football League,
The Court declines to endorse, however, the Board’s application of the Federal Arbitration Act or its reading of the precedent applying that Act. The NLRA, as interpreted in Horton, conflicts with the FAA, as interpreted by the Supreme Court. The Board says employees covered by the NLRA must have some forum — in arbitration or in court — to pursue collective claims about their employment. 357 N.L.R.B. No. 184, at *16. A fair reading of the FAA and the precedents, on the other hand, requires this Court to enforce the Delоck/Securitas agreement to arbitrate all employment-related disputes individually, not collectively. E.g., Stolt-Nielsen, 559 U.S. at-,
Falling back to either an express repeal by the Norris-LaGuardia Act or an implied repeal by the National Labor Relations Act does not resolve the collision. Cf. Horton, 357 N.L.R.B. No. 184, at *14, *16 n. 26. Though Congress first enacted the FAA in 1925, it reenacted the statutе in 1947 — after passing the Norris-LaGuardia Act and reenacting the NLRA. Federal Arbitration Act, ch. 213, 43 Stat. 883 (1925); Norris-LaGuardia Act, ch. 90, 47 Stat. 70 (1932); National Labor Relations Act, ch. 120, 61 Stat. 136 (1947); Federal Arbitration Act, ch. 392, 61 Stat. 670 (1947). The terms of § 2 of the Federal Arbitration Act have never varied. The Board stumbled on the statutory history by concluding that the FAA had to give way because of when Congress had enacted these statutes.
CompuCredit instructs that there must be a “contrary congressional command” to override the FAA’s mandate. — U.S. at -,
The NLRA’s text contains no command that is contrary to enforcing the FAA’s mandate. The Act’s protection of concerted activities does not guarantee an unwaivable right to proceed as a group in either litigation or arbitration. The Age Discrimination in Employment Act and the Fair Labor Standards Act offer employees col
The parties having made no argument from the NLRA’s legislative history, the Court moves to the conflict of statutory purposes. Gilmer,
First, while the Board said its decision did not favor litigation over arbitration, in practice it wоuld. Collective arbitration can no more be manufactured by the Board than it can by the California Supreme Court. Concepcion, — U.S. at -,
Second, adopting the Board’s reasoning would lead to a patchwork. An employee and an employer can agree to resolve the employee’s statutory claims in arbitration. Gilmer,
Third, though the Board said that the impact of its decision would be small, the Court respectfully disagrees. Pick any kind of employment-related claim: race discrimination, unpaid wages, sex discrimination. Under the Horton rationale, no agreement to resolve the claim in arbitration on an individual basis can be enforced if two or more employees assert the claim in concert. That would be a sweeping change in the law.
Delock has not demonstrated that the National Lаbor Relations Act’s protection of concerted activities overrides the FAA’s mandate to enforce his arbitration agreement with Securitas. CompuCredit, — U.S. at-,
4. Interlocutory Appeal. Delock seeks to pursue one. Securitas resists. Under 28 U.S.C. § 1292(b), one aspect of the case merits interlocutory review, another does not. Union County, Iowa v. Piper Jaffray & Co., 525 F.3d 643, 646 (8th Cir.2008).
The contract-formation issues decided a few months ago are commonplace. The Court sees no substantial ground for a difference of opinion about the governing Arkansas law. The Court’s earlier Order provides important background^ lays out the essential undisputed facts and incorporates the parties’ arbitration agreement. But certifying the Order for appeal now would not “materially advance the ultimate termination of the litigation.” Union County, 525 F.3d at 646. The formation issues decided in the Court’s March 2012 Order, Document No. 57, therefore do not merit interlocutory review.
That Horton makes the enforceability of the parties’ arbitration agreement a complicated questiоn does not satisfy § 1292(b). The statute “was not intended merely to provide review of difficult rulings in hard cases.” Union County,
First, the enforceability of the parties’ arbitration agreement notwithstanding Horton presents a controlling question of law. No facts are disputed. The efficacy of the class-action waiver is not a discretionary decision. Cf. Control Data Corp. v. Int’l Business Machines Corp.,
This question is controlling. If this Court has answered сorrectly, then the guards’ FLSA claims belong in arbitration, where they will be handled one by one. If this Court has answered incorrectly, then the guards’ claims belong in court, with the opportunities for certification, notice, and opt-in by fellow employees. No danger exists for a advisory opinion on a question that cannot yet be asked with clarity. Cf. Control Data Corp.,
Second, there is a substantial ground for difference of opinion about the enforceability of the parties’ arbitration agreement. The National Labor Relations Board has concluded that this kind of collective-action-waiving contract is unenforceable under the NLRA. From Gilmer to Concepcion to CompuCredit, the Supreme Court
Third, the statute asks whether an immediate appeal “may materially advance the ultimate termination of the litigation[.]” 28 U.S.C. § 1292(b). Resolution of the controlling and contested issue оf law “must promise to speed up the litigation.” Ahrenholz,
If this Court is mistaken about enforceability, then after these twelve guards’ claims have been arbitrated individually, and after those awards have been confirmed (or not, as may be), 9 U.S.C. § 9, and after the Court of Appeals reverses and returns the case for adjudication as a collective action, 9 U.S.C. § 16(a), the parties will have to start over. That long road would waste everyone’s scarce resources. True, if this Court has decided enforceability correctly, the time and cost of appeal will be incurred sooner rather than later. But class waivers are now ubiquitous in employment-related agreements. And getting definitive guidance from a Court of Appeals’ decision would help resolve this case, like cases, and would bring more certainty into the marketplace.
Securitas argues that an immediate appeal will frustrate the strоng pro-arbitration federal policy. At the margin, yes. But the FAA allows for this possibility. The Act recognizes the propriety of an interlocutory appeal of an order compelling arbitration if § 1292(b) is satisfied. 9 U.S.C. § 16(b). All material things considered, the Court concludes that an interlocutory appeal holds promise for speeding up this litigation.
The Court confirms its earlier ruling staying this case and compelling arbitration. Motion, Document No. 58, granted in рart and denied in part. The Court certifies that this “order involves a controlling question of law as to which there is substantial ground for difference of opinion and that an immediate appeal from [this] order may materially advance the ultimate termination of [this] litigation[.]” 28 U.S.C. § 1292(b). The Court stays the initiation of arbitration until 31 October 2012 — so Delock can seek permission to take an interlocutory appeal, Securitas can respond, and the Court of Appeals can exercise its informed discretion under the statute. The parties should keep this Court informed about developments in the higher Court. If the Court of Appeals permits the interlocutory appeal, then the stay of arbitration shall be extended automatically until the Eighth Circuit issues its mandate.
So Ordered.
Notes
Two other circuits came to the same conclusion in unpublished opinions whose precedential value is cloudy. Vilches v. The Travelers Companies, Inc.,
