Recently we posted in NLRB Finds Class Action Litigation Protected Activity Under
NLRA that employees' right to pursue litigation collectively in a class
action had been upheld by the National Labor Relations Board (NLRB).
Unfortunately, although the D.R. Horton , Inc. decision was issued
only a month ago, already a district court in California has provisionally
acted to limit the scope of the decision.
Fatemah Johnmohammadi brought a class action against
Bloomingdale's Inc. asserting violations of California wage laws.
Bloomingdale's responded by removing the case to federal court and moving to
compel non-class arbitration based on an agreement that Johnmohammadi had
signed as part of her initial paper work when she started working for
Bloomingdale's. Unlike D.R. Horton, Bloomingdale's allowed employees to
choose to opt out of the arbitration agreement if they did so within thirty
days. Bloomingdale's even purports to keep the information on who opts
out confidential so that managers cannot retaliate because they do not know who
has chosen to opt out. U.S. District Judge George H. Wu provisionally
ruled that the voluntary nature of the arbitration agreement made it
enforceable. Johnmohammadi v. Bloomingdale's Inc., case number
11-cv-6434, in the U.S. District Court for the Central District of
California. In addition to opposing the motion in court Johnmohmmadi has
filed an unfair labor practice charge with the NLRB.
While the NLRA is often thought of as dealing exclusively with issues
relating to unionization, Section 7 of the National Labor Relations Act (NLRA)
also protects the right of employees who are not members of a union to engage
in "concerted activities" for the purpose of "mutual aid or protection."
In D.R. Horton, Inc. the NLRB recognized, "Employees are both more
likely to assert their legal rights and also more likely to do so effectively
if they can do so collectively." 357 N.L.R.B. No. 184 (2012). This
is because employees face the risk of retaliation from their employers when
they engage in litigation to improve their working conditions.
One of the basic underpinnings of the NLRA is Congress's
recognition of the "inequality of bargaining power between employees who do not
possess full freedom of association or actual liberty of contract and employers
who are organized in the corporate or other forms of ownership association."
29 U.S.C. § 151. Most new hires do not have legal advice to enable
them to fully understand the rights they are agreeing to forgo when they sign
an individual arbitration agreement with their employer. Even those
employees who know that they are signing away their rights may have reason to
distrust an employer's promise of confidentiality and fear retaliation for
failure to sign.
The NLRA was enacted to protect public rights. In
the context of voluntary individual employment contracts that were used to
delay bargaining with a union, the Supreme Court declared that "[w]herever
private contracts conflict with [the NLRB's mandate] they obviously must yield
or the Act would be reduced to a futility." J.I. Case Co. v. NLRB, 321 U.S. 332, 337 (1944) [an enhanced version of this opinion is available to lexis.com
subscribers]. Similarly, individual employment contracts that
prevent an employee from engaging in concerted activity, including pursuing
legal claims in a class or collective action, expressly conflict with the NLRA
and therefore should not be enforceable. Hopefully, when Judge Wu issues
his final ruling he will allow Johnmohmmadi's class action to proceed.
Abbey Spanier Rodd & Abrams, LLP, located in New York
City, is a well-recognized national class action and complex litigation law
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