Convergys Corp. v. National Labor Relations Board, 080717 FED5, 15-60860

Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
Judge Panel:Before HIGGINBOTHAM, ELROD, and HIGGINSON, Circuit Judges. STEPHEN A. HIGGINSON, Circuit Judge, concurring in judgment: PATRICK E. HIGGINBOTHAM, Circuit Judge, dissenting:
Opinion Judge:JENNIFER WALKER ELROD, Circuit Judge.
Party Name:CONVERGYS CORPORATION, Petitioner Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent Cross-Petitioner.
Case Date:August 07, 2017
Docket Nº:15-60860
 
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CONVERGYS CORPORATION, Petitioner Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD, Respondent Cross-Petitioner.

No. 15-60860

United States Court of Appeals, Fifth Circuit

August 7, 2017

         On Petition for Review and Cross-Application for Enforcement of an Order of the National Labor Relations Board

          Before HIGGINBOTHAM, ELROD, and HIGGINSON, Circuit Judges.

          JENNIFER WALKER ELROD, Circuit Judge.

         The National Labor Relations Board determined that Convergys violated the National Labor Relations Act both by requiring job applicants to sign a class and collective action waiver and by subsequently seeking to enforce the waiver. Convergys seeks review of the Board's determination, arguing that it conflicts with our binding case law. We GRANT Convergys's petition for review and DENY the Board's cross-application for enforcement.

         I.

         Convergys requires job applicants to sign an agreement that includes the following waiver: I further agree that I will pursue any claim or lawsuit relating to my employment with Convergys (or any of its subsidiaries or related entities) as an individual, and will not lead, join, or serve as a member of a class or group of persons bringing such a claim or lawsuit.

         Despite having signed this agreement, a Convergys employee brought class and collective Fair Labor Standards Act (FLSA) claims against the company in the District Court for the Eastern District of Mississippi. Convergys sought to enforce the waiver agreement by filing a motion to strike these claims. The employee filed charges with the National Labor Relations Board, asserting that the company interfered with the exercise of employee rights by maintaining and by enforcing the waiver agreement. The district court denied the company's motion to strike, Convergys settled the FLSA lawsuit, and the employee requested to withdraw the charges she filed with the Board. However, the Board's General Counsel issued a complaint alleging that Convergys had violated Section 8(a)(1) of the National Labor Relations Act (NLRA) both by requiring job applicants to sign the waiver and by seeking to enforce the waiver in the employee's lawsuit.

         An Administrative Law Judge (ALJ) recommended a finding that Convergys had violated Section 8(a)(1) of the NLRA, relying on the Board's prior decision in D. R. Horton, Inc., 357 NLRB 2277, No. 184 (2012). The ALJ's reliance on this decision was subsequently undermined by our denial of enforcement in D. R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013) (Horton). Nevertheless, the Board adopted the ALJ's opinion, as modified, in a two-to-one decision.1 The Board majority sought to distinguish Horton and to rely instead on other Board decisions recognizing a broad "right of employees to join together to improve their terms and conditions of employment through litigation." Notwithstanding these Board decisions, the Board dissent would have relied on "the multitude of court decisions that have enforced class waivers, " including the Fifth Circuit's Horton decision. The Board ordered Convergys to cease and desist from requiring applicants to sign a waiver, to cease and desist from enforcing the waiver, and to take steps to ensure all applicants and current and former employees knew the waiver was no longer in force. Convergys petitioned for review of the Board's decision, and the Board submitted a cross-application for enforcement of its order.

         II.

         Section 7 of the NLRA provides: Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their 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 activities except to the extent 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. The threshold question in this case is whether Section 7's guarantee of the right "to engage in other concerted activities for the purpose of . . . other mutual aid or protection" contemplates a right to participate in class and collective actions.

         This court has already rejected the Board's position that Section 7 guarantees a right to participate in class or collective actions, holding that the use of a class or collective action is a procedure rather than a substantive right.2 Horton, 737 F.3d at 357;3

id. at 361; see also id. at 362 (noting that, under the Board's interpretation, "the NLRA would have to be protecting a right of access to a procedure that did not exist when the NLRA was (re)enacted"). Despite our decision in Horton and similar rulings by a majority of circuits that have considered the issue, 4 the Board has persistently clung to its view that Section 7 guarantees a substantive right to participate in class and collective actions, and we have persistently declined to enforce Board orders based on this disregard of our law.5 We recognize that the Supreme Court's decision in NLRB v. Murphy Oil USA, Inc., cert. granted, 137 S.Ct. 809 (2017), may resolve the issue shortly. In the meantime, however, we must apply our circuit's binding precedent. See, e.g.,

Horton, 737 F.3d at 344; Murphy Oil, 808 F.3d at 1013.

         In Horton, we considered the Board's position that a class and collective action waiver violated the NLRA and determined that the waiver "must be enforced according to its terms." Horton, 737 F.3d at 362. Because the waiver at issue appeared in an arbitration agreement, we inquired whether enforcement of the agreement under the Federal Arbitration Act (FAA) was "precluded by another statute's contrary congressional command." Id. at 358. We recognized that a contrary congressional command could have been implicit in a "conflict between the FAA and the NLRA's purpose, " but explained that "we do not find such a conflict." Id. at 361. The reason that the FAA and the NLRA did not conflict was that Section 7 could not be interpreted to create a substantive right to participate in class and collective actions-as we explained, "a substantive right to proceed collectively has been foreclosed by prior decisions." Id. Thus, our determination in Horton that a class and collective action waiver is enforceable was based on the fact that "[t]he use of class action procedures . . . is not a substantive right." Id. at 357.

         Because our decision in Horton was based on our interpretation of Section 7 and our reasoning was not limited to interpretation and application of the FAA, the Board's argument that Horton is limited to the arbitration context is unpersuasive.6 Horton's interpretation of Section 7 is binding on this panel. See Jacobs v. Nat'l Drug Intelligence Ctr., 548 F.3d 375, 378 (5th Cir. 2008) ("[O]ne panel of our court may not overturn another panel's decision, absent an intervening change in the law, such as by a statutory amendment, or the Supreme Court, or our en banc court."); see also Gochicoa v. Johnson, 238 F.3d 278, 286 n.11 (5th Cir. 2000) ("When confronting decisions of prior panels . . . we are bound by not only the result but also those portions of the opinion necessary to that result.").

         The Board's argument that Section 7 creates a substantive right to participate in class and collective actions ignores Horton's contrary holding that "[t]he use of class action procedures . . . is not a substantive right." Horton, 737 F.3d at 357. Moreover, the Board's assertion that the waiver in Horton was permissible only because the FAA overrode the NLRA contradicts our determination in Horton that the statutes are not in conflict. See id. at 361. Finally, the Board's suggestion that Horton is distinguishable because the FAA empowers arbitration agreements to waive rights that other agreements cannot waive is contrary to Supreme Court precedent, which holds that the FAA places arbitration agreements "on an equal footing with other contracts." AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 339 (2011). For all these reasons, Horton precludes the Board's position.

         We observed in Horton that "a substantive right to proceed collectively has been foreclosed by prior decisions." Horton, 737 F.3d at 361. That is why, even before Horton, a district court upheld the very waiver that is at issue in this case, explaining that "there is no logical reason to distinguish a waiver in the context of an arbitration agreement from a waiver in the context of any other contract" and that "class action waivers are upheld because they are contractual provisions that do not affect any substantive rights." Palmer v. Convergys Corp., No. 7:10-CV-145, 2012 WL 425256, at *2 (M.D. Ga. Feb. 9, 2012). After our decision in Horton, the idea that Section 7 protects a substantive right to participate in class...

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