Cellular Sales of Mo., LLC v. Nat'l Labor Relations Bd.

• Decision Date: 02 June 2016
• Docket Number: No. 15-1620, No. 15-1860,15-1620
• Citation: 824 F.3d 772
• Parties: Cellular Sales of Missouri, LLC, Petitioner v. National Labor Relations Board, Respondent. Labor Law Scholars, Amicus on Behalf of Respondent. Cellular Sales of Missouri, LLC, Respondent v. National Labor Relations Board, Petitioner. Labor Law Scholars, Amicus on Behalf of Petitioner.
• Court: U.S. Court of Appeals — Eighth Circuit

824 F.3d 772

Cellular Sales of Missouri, LLC, Petitioner

v.National Labor Relations Board, Respondent.

Labor Law Scholars, Amicus on Behalf of Respondent.

Cellular Sales of Missouri, LLC, Respondent

v.National Labor Relations Board, Petitioner.

Labor Law Scholars, Amicus on Behalf of Petitioner.

No. 15-1620

No. 15-1860

United States Court of Appeals, Eighth Circuit.

Submitted: January 13, 2016

Filed: June 2, 2016

Thomas Christopher Bailey, Greensfelder & Hemker, Saint Louis, MO, Charles Larry Carbo, III, Kevin D. Jewell, Julie Rachelle Offerman, Chamberlain & Hrdlicka, Houston, TX, for Respondent.

Jeffrey William Burritt, Linda Dreeben, Deputy Associate General Counsel, Richard F. Griffin, Jr., Daniel L. Hubbel, Gary Shinners, Gary Shinners, National Labor Relations Board, Appellate and Supreme Court Litigation Branch, Washington, DC, for Respondent.

Christopher N. Grant, Schuchat & Cook, Saint Louis, MO, for Amicus on Behalf of National Labor Relations Board.

Before WOLLMAN, MELLOY, and COLLOTON, Circuit Judges.

WOLLMAN, Circuit Judge.

The National Labor Relations Board (Board) found that Cellular Sales of Missouri, LLC (Cellular Sales) had violated sections 7 and 8(a)(1) of the National Labor Relations Act (NLRA), 29 U.S.C. §§ 157, 158(a)(1), by maintaining and enforcing a mandatory arbitration agreement under which employees waived their rights to pursue class or collective action to redress employment-related disputes in any forum. The Board also found that employees of Cellular Sales would reasonably understand the arbitration agreement to waive or impede their rights to file unfair labor practice charges with the Board. Cellular Sales petitions for review, arguing that the Board's order should not be enforced, and the Board cross-applies for enforcement. We enforce the order in part and decline to enforce the order in part.

John Bauer, formerly an independent contractor for Cellular Sales, was hired by the company as an employee in January 2012. As a condition of his employment, Bauer entered into an employment agreement that included a provision under which he agreed to arbitrate individually “[a]ll claims, disputes, or controversies” related to his employment and to waive any class or collective proceeding (arbitration agreement). The arbitration agreement provided in relevant part:

All claims, disputes, or controversies arising out of, or in relation to this document or Employee's employment with Company shall be decided by arbitration.... Employee hereby agrees to arbitrate any such claims, disputes, or controversies only in an individual capacity and not as a plaintiff or class member in any purported class, collective action, or representative proceeding.... The decision of the arbitrator shall be final, binding, and enforceable in any court of competent jurisdiction and the parties agree that there shall be no appeal from the arbitrator's decision.... Except for the exchange of documents that the parties intend to use to support their claims and defend against the other parties' claims, there shall be no interrogatories, depositions or other discovery in any arbitration hereunder.

Bauer's employment with Cellular Sales ended in late May 2012. Approximately five months later he filed a putative class-action lawsuit against the company in federal court, alleging violations of the Fair Labor Standards Act (FLSA), 29 U.S.C. §§ 201 -219. Cellular Sales moved to dismiss the lawsuit and compel arbitration. The district court¹ granted the motion, concluding that the arbitration agreement—including the class-action waiver—was enforceable. Bauer then commenced an arbitration proceeding against Cellular Sales. The parties eventually settled, and the district court granted their joint motion to approve the settlement and to dismiss Bauer's lawsuit with prejudice.

While his lawsuit was pending, Bauer filed an unfair labor practice charge with the Board, claiming that Cellular Sales violated his right to engage in protected concerted activity in violation of sections 7 and 8(a)(1) of the NLRA when it required him to sign an arbitration agreement that included a class-action waiver. The Board issued a complaint, and an administrative law judge (ALJ) ruled in favor of the Board, concluding that Cellular Sales's arbitration agreement violated the NLRA because of its individual arbitration requirement and because employees would reasonably interpret the arbitration agreement as barring or restricting their rights to file unfair labor practice charges with the Board. The ALJ also concluded that Cellular Sales had violated the NLRA by moving to dismiss Bauer's putative class-action lawsuit and compel enforcement of the arbitration agreement.

The Board affirmed and adopted the ALJ's rulings and findings. The Board ordered Cellular Sales to either rescind the arbitration agreement or revise it to clarify that, by signing the agreement, employees do not waive their rights to pursue employment-related class or collective actions in all forums and are not restricted in their rights to file charges with the Board. It also ordered Cellular Sales to notify all of its current and former employees of these changes; to notify the district court that these changes were made and that the company no longer opposed Bauer's lawsuit (even though the lawsuit had been dismissed over a year earlier); and to reimburse Bauer for legal fees and expenses incurred in opposing Cellular Sales's motion to dismiss and compel arbitration (even though Cellular Sales had prevailed on its motion, Bauer had not appealed, and the parties had ultimately settled). This petition for review and cross-application for enforcement followed.

We review the Board's findings of fact for substantial evidence on the record as a whole, that is, for such relevant evidence as “ ‘a reasonable mind might accept as adequate to support’ a finding.” NLRB v. Am. Firestop Sols., Inc. , 673 F.3d 766, 767–68 (8th Cir. 2012) (quoting Universal Camera Corp. v. NLRB , 340 U.S. 474, 477, 71 S.Ct. 456, 95 L.Ed. 456 (1951) ). We review the Board's conclusions of law de novo. Id. at 768. We will defer to the Board's interpretation of the NLRA “so long as it is rational and consistent with that law,” id. (citations omitted), but we need not defer to the Board's interpretation of other federal statutes, see, e.g. , Owen v. Bristol Care, Inc. , 702 F.3d 1050, 1054 (8th Cir. 2013) ; see also Hoffman Plastic Compounds, Inc. v. NLRB , 535 U.S. 137, 144, 122 S.Ct. 1275, 152 L.Ed.2d 271 (2002) (“[W]e have ... never deferred to the Board's ... preferences where such preferences potentially trench upon federal statutes and policies unrelated to the NLRA.”).

Cellular Sales first argues that the Board erred in finding that because the class-action waiver restricted employees' substantive rights under section 7 to engage in protected concerted activity, the arbitration agreement violated section 8(a)(1) of the NLRA. Cellular Sales notes that in reaching this conclusion, the Board relied on two of its prior decisions, D.R. Horton, Inc. , 357 N.L.R.B. No. 184, 2012 WL 36274 (Jan. 3, 2012), and Murphy Oil USA, Inc. , 361 N.L.R.B. No. 72, 2014 WL 5465454 (Oct. 28, 2014), each of which concluded that arbitration agreements imposing similar class-action waivers violated section 8(a)(1). Cellular Sales points out that the Board's reasoning in those decisions was directly rejected by the Fifth Circuit. See D.R. Horton, Inc. v. NLRB , 737 F.3d 344, 362 (5th Cir. 2013) (denying enforcement in relevant part, rejecting Board's position that use of class-action procedure was a “substantive right” under section 7 of the NLRA, and concluding that “[b]ecause the Board's interpretation does not fall within the [Federal Arbitration Act's (FAA) ] ‘saving clause,’ and because the NLRA does not contain a congressional command exempting the statute from application of the FAA,” the arbitration agreement, including the class-action waiver, “must be enforced according to its terms”); Murphy Oil USA, Inc. v. NLRB , 808 F.3d 1013, 1018 (5th Cir. 2015) (denying enforcement in relevant part and concluding that the employer “committed no unfair labor practice by requiring employees to relinquish their right to pursue class or collective claims in all forums by signing the arbitration agreements at issue”). Cellular Sales also points to our court's decision rejecting the Board's reasoning—albeit in a case that was not on review from a Board decision. Owen v. Bristol Care, Inc. , 702 F.3d 1050, 1053–55 (8th Cir. 2013) (rejecting the Board's position in D.R. Horton and joining “fellow circuits that have held that arbitration agreements containing class waivers are enforceable in claims brought under the FLSA”).

The Board acknowledges that its position has twice been rejected by the Fifth Circuit, and it concedes that our holding in Owen is fatal to its argument “that a mandatory agreement requiring individual arbitration of work-related claims” violates the NLRA. Consequently, in addition to filing its brief in this matter, the Board filed a motion for initial hearing en banc and requested that we reconsider our holding in Owen . The Board's motion was denied, and thus, in accordance with Owen , we conclude that Cellular Sales did not violate section 8(a)(1) by requiring its employees to enter into an arbitration agreement that included a waiver of class or collective actions in all forums to resolve employment-related disputes. Accordingly, we grant the petition for review and decline to enforce the Board's order with respect to this issue. See Owen , 702 F.3d at 1053–55 ; see also D.R. Horton , 737 F.3d at 362 ; Murphy Oil , 808 F.3d at 1018.

Cellular Sales next argues that the Board erred when it found that the company violated section 8(a)(1) by seeking to enforce the arbitration agreement through a motion to dismiss and compel arbitration in Bauer's putative class-action lawsuit. The Board determined that “an employer's enforcement of...