The Cellular Sales NLRB decision was preceded by the
filing of a class action lawsuit in November 2012 in the United
States District Court for the Western District of Missouri.
Plaintiff John Bauer filed the lawsuit on behalf of himself and all
other similarly situated current and former sales professionals of
Cellular Sales of Missouri, LLC and Cellular Sales of Knoxville,
Inc. Bauer alleged that the companies violated the Fair Labor
Standards Act and the Kansas Wage Payment Law by failing to pay
their sales professionals minimum wage and overtime pay.
The companies filed a motion to stay the litigation and compel
arbitration pursuant to the terms of the arbitration agreement that
Bauer and other sales professionals signed as a condition of their
employment. The arbitration agreement provided that all
employment-related claims must be resolved through binding
individual arbitration. The agreement specifically prohibited class
or collective arbitrations.
While the lawsuit was pending, Bauer filed a charge with the NLRB,
alleging that the arbitration agreement violates Section 8(a)(1) of
the National Labor Relations Act ("NLRA") by interfering
with employees' right to engage in protected concerted
activity. The NLRB issued a complaint based on Bauer's charge,
which went to a hearing before an ALJ. Relying on the D.R.
Horton decision, the ALJ concluded that the arbitration
agreement violated Section 8(a)(1) by requiring employees to waive
their right to engage in collective or class actions or
arbitrations.
Since the D.R. Horton decision in January 2012, the NLRB
has invalidated numerous arbitration agreements that contained
class action waivers. We
previously posted about several of these recent NLRB decisions.
The companies argued that the Supreme Court's recent decision
in American Express Co. v. Italian Colors Restaurant
rendered D.R. Horton invalid, but the ALJ rejected that
argument, finding American Express distinguishable since
it did not specifically address employees' rights under the
NLRA.
Unless and until the D.R. Horton decision is overturned on
appeal, employers who maintain mandatory arbitration policies may
want to review their arbitration agreements to ensure that they do
not prevent employees from exercising their right to engage
concerted activity protected by Section 7 of the NLRA.
Originally published on the Employer's Law Blog
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.