NLRB Finds Employee Arbitration Agreement Waiving Class Claims Violates Federal Labor Law
In DR Horton, a decision issued on January 3 and applicable to most private sector employers, whether unionized or not, the National Labor Relations Board (NLRB) held that federal labor law prevents employers from requiring their employees, as a condition of employment, to agree to broad waivers that would deny their right to pursue employment-related class actions both in court and in arbitration, leaving them no forum for pursuing class or collective claims. As a result, an important tool for managing the risk of employment-related litigation has been taken away (for now).
The facts of the case are straightforward. DR Horton, like many employers, required its employees to sign an arbitration agreement as a condition of employment. The agreement required employees to arbitrate all claims arising out of their employment, and precluded arbitrators from issuing class or group relief. As a result, employees were prevented from bringing class or collective actions in any forum. Relying on this agreement, DR Horton refused to arbitrate a class action alleging that it had misclassified certain employees as exempt from the protections of the Fair Labor Standards Act (FLSA).
Not so fast, according to the NLRB. Tracing federal labor law back to its origins, the NLRB found that the filing of a class action “to redress workplace wrongs or improve working conditions” is activity at “the core” of what Congress intended to protect when it enacted the National Labor Relations Act in 1935. This intent, the NLRB reasoned, is reflected in Section 7 of the Act, which gives employees the right to engage in “concerted activities” for the purposes of “mutual aid or protection.” Relying on Section 7, the NLRB found that Employers cannot compel their employees, as a condition of employment, to entirely waive the right to bring class or collective actions.
The NLRB’s ruling in DR Horton clashes with the U.S. Supreme Court’s recent decision in AT&T Mobility v. Concepcion, which held that arbitration clauses that waive the right to bring class claims entirely (in the commercial contract context) may be lawful and enforceable. But unless and until the courts intervene to resolve this tension, requiring your employees to completely waive the right to bring employment-related class or collective actions - a common feature of arbitration agreements - is probably no longer permissible under federal labor law.
If You're Interested In Learning More, Sign Up For Our Webinar
Stoel Rives is hosting a webinar on January 11, 2012, to address employee arbitration agreements generally and the DR Horton decision in particular. Click here if you're interested in learning more or attending.
Thanks For Nominating Stoel Rives World of Employment As A Top 25 L&E Law Blog!
Based on feedback from you, our readers, LexisNexis has nominated the Stoel Rives World of Employment as a "Top 25" law blog in the Labor and Employment category! Thanks to those of you who nominated us to this elite group. Readers now have until September 12 to vote for their favorite blog. After voting is completed LexisNexis will announce which of the nominated blogs are selected to the final top 25.
Please Cast Your Vote For Us
At this point we'd like to engage in a bit of shameless self-promotion, and urge you to cast your vote for us before September 12. To do that, simply click here to vote, scroll to the very bottom of the page to the Add a Comment section, and add a comment. In the comment field, type something like "I vote for the Stoel Rives World of Employment blog." You can also view information about the competition and see the other nominated blogs on this page too. If you haven't already used the LexisNexis Communities feature, you may need to create an account to be able to vote.
Again, thanks for the nomination and support! (Here ends the shameless self-promotion...now we'll get back to blogging.)
- Your Stoel Rives World of Employment Bloggers
Oregon Court Of Appeals Holds Non-Disabled Employees Are Protected When Requesting Accommodations
On Thursday, in Herbert v. Altimeter, the Oregon Court of Appeals held that an employee does not need to actually be disabled in order to be protected from retaliation for requesting an accommodation under Oregon’s disability anti-discrimination law. The case serves as a useful reminder that anti-retaliation protections, like those in the Oregon disability law, can be very broadly applied and protect many types of employee requests or complaints. Employers should be careful when disciplining or terminating any employee who has recently made some kind of arguably protected request or complaint.
Sherrie Herbert was terminated from her truck-driving job with Altimeter shortly after she became ill, allegedly from exhaust fumes in the cab of her truck, and she reported those problems to her boss. She sued under various retaliation theories, including that she was terminated in retaliation for her having requested an accommodation for a disability (i.e., requesting to be reassigned to a different truck). The trial court granted a directed verdict for Altimeter at the close of Herbert’s case at trial and dismissed all claims.
The Court of Appeals reversed. Altimeter argued that it couldn’t have retaliated against plaintiff for requesting an accommodation as a matter of law, because she was not disabled and therefore not protected under the Oregon disability law's anti-retaliation provisions. The court rejected that argument, noting that while the law requires Oregon employers to provide a reasonable accommodation to a “person with a disability,” the anti-retaliation provision, ORS 659A.109, protects any “worker” who requests an accommodation. So, the court reasoned, by its plain terms the statute protects a broader class of employees (all of them) who make protected requests for accommodations, even though those employees may not be entitled to an actual accommodation.
The opinion also contained an illustrative reminder about the importance of well-drafted written responses filed with the Equal Employment Opportunity Commission (“EEOC”), the Oregon Bureau of Labor and Industries (“BOLI”), and similar agencies. Those written position statements are admissible later; if they’re not carefully drafted they could come back to bite the complainant. In Herbert, Altimeter’s BOLI position statement included several damaging admissions, the worst of which essentially stated that she was terminated because she insisted she be reassigned to another truck, i.e., requested an accommodation. Despite a general lack of other evidence of retaliation presented by Herbert at trial, the Court held that Altimeter's admission in the BOLI statement alone was enough to allow that claim to go to a jury.
Oops! While there are no easy, hard-and-fast rules about how to draft effective BOLI or EEOC position statements, generally you want to say as little as possible while still making your case, and above all, you don't want to provide the only evidence a plaintiff will need to take his or her case all the way to a jury!! Those kinds of careless statements early on can make litigating employment discrimination lawsuits very expensive for employers, because they become much harder to get dismissed before trial.
Oregon Legislature Bans Mandatory Meetings
A new Oregon bill will prohibit employers from requiring employees to attend mandatory or "captive audience" meetings on, among other topics, labor unions. Governor Ted Kulongoski is expected to sign the bill, which would them become law effective January 1, 2010. Click here to read SB 519.
SB 519 prohibits an employer from taking action against an employee who refuses to participate in communications concerning the employer’s opinions on religious or political matters. Religious or political matters is defined broadly and includes communications to employees about unionization. An employee who suffers economic loss (through termination or suspension) as a result of the bill can sue his or her employer and recover treble damages. The bill also allows employees to obtain an injunction prohibiting additional "captive audience" meetings.
This law might not be long-lived: the U.S. Supreme Court found a similar California law to be preempted by federal labor law. Click here to read that opinion in Chamber of Commerce v. Brown. Even if a court finds Oregon's statute to be similarly preempted (and we believe a court will), the law could still apply to employers that are not covered by federal labor law - namely, Oregon public and agricultural employers. Also, the word from Salem is that the legislature will still revise the law to provide additional protections for religious employers (such as churches and some hospitals) who hold religious meetings, so keep an eye out for those changes in the next week or so.
President Bush Signs ADA Amendments Act
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As expected, President Bush yesterday signed the ADA Amendments Act ("ADAAA") into law, significantly expanding the scope of the Americans with Disabilities Act. The final version of the law can be downloaded here. The Stoel Rives World of Employment has been actively covering the law as it wound its way through Congress, and you can follow our reporting here.
The ADAAA goes into effect January 1, 2009. To help you get ready, Stoel Rives is offering free seminars on the ADAAA in its Portland, Boise and Seattle offices on December 2, 2008. For more information and to register, click one of these links:
ADA Amendments Act Passes House - Next Stop White House
The ADA Amendments Act ("ADAAA") was passed by the U.S. House of Representatives earlier today. For more information, read the House's Press Release. As reported previously by the Stoel Rives World of Employment, the same version of the bill was recently approved by the U.S. Senate.
The next stop for the ADAAA is the White House. President Bush previously indicated he has some misgivings about the ADAAA, but given the broad bipartisan support that carried the bill through Congress, he is expected to sign it into law. (Keep in mind, it was George H.W. Bush that signed the original ADA.)
Assuming it becomes law, the ADAAA will greatly broaden the scope of the ADA. Some highlights of the ADAAA:
- Reverses several Supreme Court decisions that have seemingly narrowed the coverage of the ADA, restoring what the drafters perceive to be the original Congressional intent
- Broadens the definition of disability, including what it means to be “substantially limited in a major life activity
- Clarifies that accommodations are not be required if an individual is merely "regarded as” having a disability
- Prohibits the consideration of mitigating measures such as medication, prosthetics, and assistive technology, in determining whether an individual has a disability
- Provides coverage to people who experience discrimination based on a perception of impairment regardless of whether the individual experiences disability
The Stoel Rives World of Employment will let you know as soon as we receive word on what the White House intends to do. Stay tuned!
ADAAA Update: Senate Approves ADA Amendments Act
The U.S. Senate yesterday approved the ADA Amendments Act (ADAAA) by unanimous consent, making enactment of the ADAAA likely. As the Stoel Rives World of Employment previously reported, the ADAAA would overturn several U.S. Supreme Court decisions that many critics claim have too narrowly interpreted the Americans with Disabilities Act's coverage. To read the Senate version of the ADAAA, click here.
The ADAAA passed the House of Representatives in June by a 402-17 vote. There are minor differences between the House and Senate versions of the bill, and the House is expected to adopt the Senate version on September 17. After that, it's on to President Bush to sign the bill, which he is expected to do. Keep watching the Stoel Rives World of Employment for further updates.
