Murphy Oil USA, Inc., 10-CA-038804

• Court: National Labor Relations Board
• Writing for the Court: Mark Gaston Pearce Chairman
• Citation: 361 +NLRB No. 72
• Parties: MURPHY OIL USA, INC. AND SHEILA M. HOBSON
• Docket Number: 10-CA-038804
• Decision Date: 28 October 2014

361 +NLRB No. 72

MURPHY OIL USA, INC. AND SHEILA M. HOBSON

No. 10-CA-038804

United States of America, National Labor Relations Board

October 28, 2014

CHAIRMAN PEARCE AND MEMBERS MISCIMARRA, HIROZAWA, JOHNSON, AND SCHIFFER.

DECISION AND ORDER

Mark Gaston Pearce Chairman

For almost 80 years, Federal labor law has protected the right of employees to pursue their work-related legal claims together, i.e., with one another, for the purpose of improving their working conditions. The core objective of the National Labor Relations Act is the protection of workers' ability to act in concert, in support of one another. Section 7 of the Act implements that objective by guaranteeing employees the “ right . . . to engage in . . . concerted activities for the purpose of collective bargaining or other mutual aid or protection.” ^[1] Our national labor policy--aimed at averting “ “ industrial strife and unrest” and “ restoring equality of bargaining power between employers and employees” ^[2] --has been built on this basic premise. In protecting a substantive right to engage in collective action--the basic premise of Federal labor policy--the National Labor Relations Act is unique among workplace statutes.^[3]

The Section 7 right to act concertedly for mutual aid and protection is not limited to supporting a labor union and pursuing collective bargaining with employers. The Supreme Court has made clear that Section 7 protects employees “ when they seek to improve working conditions through resort to administrative and judicial forums. . . .” ^[4] The Court stated that “ Congress knew well enough that labor's cause is advanced on fronts other than collective bargaining and grievance settlement within the immediate employment context” and that failing to protect such conduct “ could ‘ frustrate the policy of the Act to protect the right of workers to act together to better their working conditions.” '

Early in the Act's history, the Court's decisions established that individual agreements between employees and employer cannot restrict employees' Section 7 rights. The Court in 1940 struck down individual employment contracts that required employees to present their discharge grievances individually (foreclosing any role for a union or other representative), describing the contracts as a “ continuing means of thwarting the policy of the Act.” ^[5] The principle that individual agreements could not be treated as waivers of the statutory right to act collectively was soon reaffirmed, with the Court observing that “ [w]herever private contracts conflict with [the Board' s] functions [of preventing unfair labor practices], they obviously must yield or the Act would be reduced to a futility.” ^[6] And even before the Act was passed, Congress had declared in the Norris-LaGuardia Act that individual agreements restricting employees' “ concerted activities for the purpose of . . . mutual aid or protection” -- expressly including concerted legal activity--violated federal policy and were unenforceable.^[7]

In D. R. Horton, Inc., a case of first impression decided in 2012, the Board applied these well-established principles to hold that an employer violates the National Labor Relations Act “ when it requires employees covered by the Act, as condition of their employment, to sign an agreement that precludes them from filing joint, class, or collective claims addressing their wages, hours, or other working conditions against the employer in any forum, arbitral or judicial.” ^[8] The Board reached this result relying on the substantive right, at the core of the Act, to engage in collective action to improve working conditions. It did so “ notwithstanding the Federal Arbitration Act (FAA), which generally makes employment-related arbitration agreements judicially enforceable, ” finding no conflict, under the circumstances, between Federal labor law and the FAA.^[9] “ Arbitration [under the FAA] is a matter of consent, not coercion, ” ^[10] and a valid arbitration agreement may not require a party to prospectively waive its “ right to pursue statutory remedies.” ^[11] But arbitration agreements that are imposed as a condition of employment, and that compel NLRA-covered employees to pursue workplace claims against their employer individually, do require those employees to forfeit their substantive right to act collectively--and so nullify the foundational principle that has consistently informed national labor policy as developed by the Board and the courts. To be clear, the NLRA does not create a right to class certification or the equivalent, but as the D. R. Horton Board explained, it does create a right to pursue joint, class, or collective claims if and as available, without the interference of an employer-imposed restraint.^[12]

This case turns on the issue decided in D. R. Horton . The Respondent urges us to overrule that decision, which has been rejected by the U.S. Court of Appeals for the Fifth Circuit^[13] and viewed as unpersuasive by decisions of the Second and Eighth Circuits (although the analysis by those courts was abbreviated).^[14] Scholarly support for the Board's approach, by contrast, has been strong.^[15] We have independently reexamined D. R. Horton, carefully considering the Respondent's arguments, adverse judicial decisions, and the views of our dissenting colleagues.^[16] Today we reaffirm that decision. Its reasoning and its result were correct, as we explain below, ^[17] and no decision of the Supreme Court speaks directly to the issue we consider here. “ The substantive nature of the right to group legal redress is what distinguishes the NLRA from every other statute the Supreme Court has addressed in its FAA jurisprudence, ” ^[18] and the Fifth Circuit itself acknowledged the “ force of the Board's efforts to distinguish the NLRA from all other statutes that have been found to give way to requirements of arbitration.” ^[19]

Having reaffirmed the D. R. Horton rationale, we apply it here to find that the Respondent has violated Section 8(a)(1) of the Act by requiring its employees to agree to resolve all employment-related claims through individual arbitration, and by taking steps to enforce the unlawful agreements in Federal district court when the Charging Party and three other employees filed a collective claim against the Respondent under the Fair Labor Standards Act.

FINDINGS OF FACT ^[20]

I. JURISDICTION

The Respondent, a Delaware corporation, with a place of business in Calera, Alabama, has been engaged in the operation of retail gasoline and diesel fueling stations. During the 12-month period prior to the Joint Motion and Stipulation, the Respondent, in conducting its business, purchased and received at its Calera, Alabama facility goods valued in excess of $50, 000 directly from points outside the State of Alabama. The Respondent has been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.

II. ALLEGED UNFAIR LABOR PRACTICES

A. Facts

The Respondent operates over 1000 retail fueling stations in 21 States. Prior to March 6, 2012, the Respondent required all job applicants and current employees, as a condition of employment, to execute a “ Binding Arbitration Agreement and Waiver of Jury Trial” (the Agreement). The Agreement provides in relevant part as follows:

Excluding claims which must, by statute or other law, be resolved in other forums, Company and Individual agree to resolve any and all disputes or claims each may have against the other which relate in any manner whatsoever as to [sic] Individual's employment, including but not limited to all claims beginning from the period of application through cessation of employment at Company and any post-termination claims and all related claims against managers, by binding arbitration . . . . Disputes related to employment include but are not limited to, claims or charges based upon federal or state statutes, including, but not limited to, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, as amended, and any other civil rights statute, the Americans with Disabilities Act, the Family and Medical Leave Act, the Fair Labor Standards Act or other wage statutes, the WARN Act, claims based upon tort or contract laws or common law or any other federal or state or local law affecting employment in any manner whatsoever

. . . .

Individual understands that he/she will not be considered for employment by the Company unless he/she signs this Agreement.

. . . .

By signing this Agreement, Individual and the Company waive their right to commence, be a party to, or [act as a] class member [in, any class] or collective action in any court action against the other party relating to employment issues. Further, the parties waive their right to commence or be a party to any group, class or collective action claim in arbitration or any other forum. The parties agree that any claim by or against Individual or the Company shall be heard without consolidation of such claim with any other person or entity's claim.

. . . .

INDIVIDUAL AND COMPANY UNDERSTAND THAT, ABSENT THIS AGREEMENT, THEY WOULD HAVE THE RIGHT TO SUE EACH OTHER IN COURT, TO INITIATE OR BE A PARTY TO A GROUP OR CLASS ACTION CLAIM, AND THE RIGHT TO A JURY TRIAL, BUT, BY EXECUTING THIS AGREEMENT, BOTH PARTIES GIVE UP THOSE RIGHTS AND AGREE TO HAVE ALL EMPLOYMENT DISPUTES BETWEEN THEM RESOLVED BY MANDATORY, FINAL AND BINDING ARBITRATION. ANY EMPLOYMENT RELATIONSHIP BETWEEN INDIVIDUAL AND COMPANY IS TERMINABLE AT-WILL, AND NO OTHER INFERENCE IS TO BE DRAWN FROM THIS AGREEMENT.

The Respondent required the Charging Party, Sheila M. Hobson, to sign the Agreement when she applied for employment in November 2008. Hobson was employed by the Respondent at its Calera, Alabama facility from November 2008 to September 2010. In June 2010, Hobson

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