Acuity Specialty Products, Inc., 32-CA-075221

• Court: National Labor Relations Board
• Parties: Acuity Specialty Products, Inc. d/b/a ZEP, Inc. and Lynn Woodford and Doug Heffernan.
• Docket Number: 32-CA-075221,32-CA-102838
• Decision Date: 16 May 2016

Acuity Specialty Products, Inc. d/b/a ZEP, Inc. and Lynn Woodford and Doug Heffernan.

Nos. 32-CA-075221, 32-CA-102838

United States of America, National Labor Relations Board

May 16, 2016

DECISION AND ORDER

Mark Gaston Pearce, Chairman

On July 21, 2014, Administrative Law Judge Mindy E. Landow issued the attached decision. The Respondent filed exceptions and a supporting brief, the General Counsel filed an answering brief, and the Respondent filed a reply brief.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The judge found, applying the Board's decision in D. R. Horton, 357 NLRB 2277 (2012), enf. denied in relevant part 737 F.3d 344 (5th Cir. 2013), that the Respondent violated Section 8(a)(1) of the Act by promulgating, maintaining, and enforcing an arbitration policy that requires employees to waive their rights to pursue class or collective actions involving employment-related claims in all forums, whether arbitral or judicial. In Murphy Oil USA, Inc., 361 NLRB No. 72 (2014), enf. denied in relevant part 808 F.3d 1013 (5th Cir. 2015), the Board reaffirmed the relevant holdings of D. R. Horton, supra. The judge also found, relying on D. R. Horton and U-Haul of California, 347 NLRB 375, 377–378 (2006), enfd. 255 Fed.Appx. 527 (D.C. Cir. 2007), that maintaining the arbitration policy violated Section 8(a)(1) because employees reasonably would believe that it bars or restricts their right to file unfair labor practice charges with the Board.

The Board has considered the decision and the record in light of the exceptions and briefs and, based on the judge's application of D. R. Horton and on our subsequent decision in Murphy Oil, we affirm the judge's rulings, ^[1] findings, ^[2] and conclusions^[3] and adopt the recommended Order as modified^[4] and set forth in full below. ^[5]

The judge further found, and we agree, that the Respondent violated Section 8(a)(1) by conditioning employees' eligibility to participate in a sales bonus program upon signing the arbitration policy. There is no dispute that the program was a significant employee benefit. It granted annual bonuses to individuals ranging from $1300 to $97, 500 and thus, as the judge found, offered employees the opportunity to significantly increase their wages. There can be little doubt that gaining eligibility for a substantial monetary bonus would reasonably tend to induce employees to sign the policy and surrender their core Section 7 right to act collectively. The Respondent may not lawfully condition the receipt of benefits-here, eligibility for the bonus program-upon employees' waiver of their Section 7 rights.^[6]

ORDER

The National Labor Relations Board orders that the Respondent, Acuity Specialty Products, Inc. d/b/a Zep Inc., Los Gatos, California, its officers, agents, successors, and assigns, shall

1.Cease and desist from

(a) Promulgating, maintaining, and/or enforcing an arbitration policy known as the Alternative Dispute Resolution Policy (ADR arbitration policy) under which employees waive the right to maintain class or collective actions in all forums, whether arbitral or judicial.

(b) Promulgating and/or maintaining its ADR arbitration policy that employees reasonably would believe bars or restricts the right to file charges with the National Labor Relations Board.

(c) Conditioning eligibility to participate in an annual sales bonus program on employees' execution of the ADR arbitration policy.

(d) Withholding bonuses from employees because they did not execute the ADR arbitration policy or because they executed the ADR arbitration policy but filed or participated in employment-related class or collective claims against the Respondent.

(e) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.

2. Take the following affirmative action necessary to effectuate the policies of the Act.

(a) Rescind the unlawful ADR arbitration policy in all of its forms, or revise it in all of its forms to make clear to employees that the policy does not constitute a waiver of their right to maintain employment-related joint, class, or collective actions in all forums, and that it does not bar or restrict employees' right to file charges with the National Labor Relations Board.

(b) Notify all current and former employees who signed the policy or to whom the policy was presented that it has been rescinded or revised and, if revised, provide them a copy of the revised policy.

(c) Notify the United States District Court for the Northern District of California, in Case No. 3:13-CV-0563-RS that it has rescinded or revised the ADR arbitration policy upon which it based its motion to compel arbitration of the claims of Lynn Woodford, Doug Heffernan, and six co plaintiffs who signed the ADR arbitration policy, and inform the court that it no longer opposes their lawsuit on the basis of the ADR arbitration policy.

(d) Restore eligibility for participation in the Respondent's annual sales bonus program to employees who qualified for bonuses under the performance standards of that year's annual sales bonus plan at any time since the promulgation and implementation of the ADR arbitration policy, for whom eligibility or participation or actual compensation was withheld either because they did not execute the ADR arbitration policy or because, notwithstanding their execution of the ADR arbitration policy, they filed or participated in employment-related class or collective claims against the Respondent.

(e) Make employees whole for any losses they may have suffered as a result of the Respondent's unfair labor practices and reimburse the Charging Parties and any other plaintiffs for any reasonable attorneys' fees and litigation expenses that they may have incurred in opposing the Respondent's motion to compel arbitration, in the manner set forth in the remedy section of the judge's decision.

(f) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.

(g) Within 14 days after service by the Region, post at its California locations copies of the attached notice marked "Appendix A"^[7] and at all other locations where the ADR arbitration policy has been promulgated and/or maintained, copies of the attached notice marked "Appendix B."^[8] Copies of the notices, on forms provided by the Regional Director for Region 32, after being signed by the Respondent's authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places including all places where notices to employees are customarily posted. In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet site, or other electronic means, if the Respondent customarily communicates with its employees by such means. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. If the Respondent has gone out of business or closed the facilities involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice marked "Appendix A" to all current employees and former employees employed by the Respondent at any time since August 23, 2011, and any former employees against whom the Respondent has enforced its arbitration policy since August 23, 2011. If the Respondent has gone out of business or closed any facilities other than the ones involved in these proceedings, the Respondent shall duplicate and mail, at its own expense, a copy of the notice marked "Appendix B" to all current employees and former employees employed by the Respondent at those facilities at any time since August 23, 2011.

(h) Within 21 days after service by the Region, file with the Regional Director for Region 32 a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.

Kent Y Hirozawa, Member

Member Miscimarra, concurring in part and dissenting in part.

In this case, my colleagues find that the Respondent's "Alternative Dispute Resolution Policy and Agreement for Disputes between a Sales Rep and Acuity Specialty Products, Inc., doing business as Zep Sales and Service" (the Agreement) violates Section 8(a)(1) of the National Labor Relations Act (the Act or NLRA) because the Agreement waives the right to participate in class or collective actions regarding non-NLRA employment claims. Charging Parties Lynn Woodford, Doug Heffernan, and six other employees signed the Agreement, and later, 54 individuals, including Heffernan, Woodford, and the other six employees who also signed the Agreement, filed a lawsuit against the Respondent in Alameda County Superior Court alleging violations of California's Labor Code and Business and Professions Code. The case was removed to Federal district court, where, in reliance on the Agreement, the Respondent filed a motion to compel Heffernan, Woodford, and the six other plaintiffs who signed the Agreement to arbitrate their claims. The Federal district court granted the motion to compel arbitration. My colleagues find that the Respondent unlawfully promulgated, maintained, and enforced its Agreement. I respectfully dissent from these findings for the reasons explained in my partial dissenting opinion in Murphy Oil USA, Inc.^[1]

I agree that an...