This information provided by Clyde Jacob of Fisher Phillips.
Last Friday, the U.S. Court of Appeals for the Fifth Circuit in New Orleans, which has jurisdiction over Texas, Louisiana, and Mississippi, upheld a National Labor Relations Board case that In-N-Out Burger violated the nation’s labor laws with a uniform rule that prohibited employees wearing buttons or pins on their uniforms. In the case, the company forbade employees at a restaurant located in Austin, Texas from wearing “Fight For $15” buttons on their uniforms.
In-N-Out Burger argued that its button rule fits under a category of special circumstances because it long maintained a carefully curated public image with employee uniforms as part of that image. The Board and the Court, however, found that the prohibition in this instance of buttons related to terms and conditions of employment, protected under the National Labor Relations Act, was undercut by the company’s requirement that employees wear larger buttons twice a year – once at Christmas and at a second time in April to promote the company’s foundation for abused children. A copy of the decision is attached, and on pages 3 and 4 you can see photographs of the three actual buttons involved.
The key to the case was the inconsistent application of the no button and pin rule permitting them in two other instances. The case is concerning because In-N-Out Burger required the two buttons to be worn as part of the uniform and prohibited at all times any other buttons or pins.
It is important for employers to monitor any work rules restricting buttons and pins on required uniforms to ensure they are consistently applied across the board. Keep in mind that protected buttons are those that deal with wages, benefits, and terms and conditions of employment, including unionization. Buttons which are profane or relate to other non- work subjects, such as sports, rock/country music, animal rights, politics, etc., can be restricted.
In N Out Burger Decision on Scribd
We posted earlier today about the Supreme Court decision in three consolidated cases—Epic Systems Corporation v. Lewis; Ernst & Young, LLP v. Morris; and NLRB v. Murphy Oil USA, Inc. in which the Court upheld the right of employers to require employees to use private arbitration to resolve workplace disputes in a 5-4 decision. Now we have a more detailed summary of the impact of the decision for CUE members shared by CUE LLAC member Rob Buikema and written by his colleague Joel S. Aziere.
Earlier this week, in Epic Systems Corp. v. Lewis, the United States Supreme Court issued a decision granting significant rights to employers seeking to limit liability in class action cases. In a 5-4 decision, the Court upheld the legality of class action waivers in individual employment agreements. This means employees who sign agreements obligating them to resolve claims against their employer through individual arbitration cannot bring, or be a party to, class or collective action claims against their employer, including claims under the Fair Labor Standards Act (FLSA).
In 2012, the National Labor Relations Board (NLRB) held for the first time that these types of agreements were prohibited and unenforceable under the National Labor Relations Act. Since then, some, but not all, courts have either agreed with or deferred to the Board and refused to enforce these individual arbitration provisions. The Supreme Court has now reversed the Board’s mandate and rendered the individual arbitration provisions enforceable. This means employers are now free to place a provision in an employment agreement or severance agreement waiving the right of the employee to engage in any class-action against the employer (either in court or in arbitration) and requiring the employee instead to engage in individual arbitration to resolve any employment-related claims against the employer.
The issue before the Court was whether an agreement that requires an employer and an employee to resolve employment-related disputes through individual arbitration, and waive class and collective proceedings, is enforceable under the Federal Arbitration Act (FAA), notwithstanding the provisions of the National Labor Relations Act (NLRA).
In each case, the employer entered into an agreement with an employee providing for individualized arbitration proceedings to resolve employment disputes. Despite these agreements, the employees filed FLSA and related state law claims through class or collective actions in federal court. The employees argued the arbitration agreements, which required individual proceedings, violated the NLRA, which entitles employees to engage in protected concerted activity with regard to their terms and conditions of employment, including joining together in litigation against their employer in class or collective actions. In response, the employers argued the FAA protects mandatory arbitration agreements from judicial interference and the NLRA did not require a different result.
Until recently, courts, as well as the National Labor Relations Board’s general counsel, generally agreed that mandatory arbitration agreements between employees and their employers were enforceable. However, in D.R. Horton, a landmark decision in 2012 that provoked widespread consternation among employers, the NLRB held the NLRA’s protections for concerted activity entitled employees to join together in class proceedings, even in arbitration, notwithstanding the FAA. The NLRB’s legal position on this issue been upheld by the appellate courts for the Seventh and Ninth Circuits but rejected by the Second, Fifth and Eighth Circuit Courts of Appeals.
In its May 21, 2018, decision, the Supreme Court rejected the Board’s position and held Congress made clear in the FAA that arbitration agreements must be enforced by their own terms, including individualized proceedings and nothing the NLRA suggests otherwise. Justice Gorsuch delivered the opinion of the Court, joined by Justices Roberts, Kennedy, Thomas, and Alito. Justice Thomas filed a concurring opinion. Justice Ginsburg filed a dissenting opinion joined by Justices Breyer, Sotomayor, and Kagan.
The Court recognized the FAA requires courts to enforce agreements to arbitrate, including the terms of arbitration selected by the parties. By challenging the agreements because they require individualized arbitration, without allowing for class or collective proceedings, the employees sought to interfere with this fundamental feature of the FAA.
The contention advanced by the Board and the employees – that the NLRA overrides the FAA’s directive – was rejected by the Court. The Court pointed out that the NLRA does not mention class or collective action procedures or even hint at a clear and manifest wish to displace the FAA. Finally, the Court pointed to precedent and cited cases in which the Court rejected many efforts to manufacture conflicts between the FAA and other federal statutes.
This decision is a huge win for employers who utilize individual arbitration agreements with their employees and clears the way for continued use of such agreements.
Per POLITICO Pro, the Supreme Court today upheld the right of employers to require employees to use private arbitration to resolve workplace disputes in a 5-4 decision.
The 5-4 decision, split along the usual ideological lines, upheld the right of employers to use mandatory arbitration clauses to block the filing of class-action lawsuits over workplace issues such as unpaid overtime. The majority rejected arguments that forcing those cases into private, individual arbitration violated federal labor law.
Here’s a good initial update from the Fisher Phillips legal blog.
To the relief of employers across the country, the Supreme Court today ruled in a 5-to-4 decision that class action waivers in employment arbitration agreements do not violate the National Labor Relations Act (NLRA) and are, in fact, enforceable under the Federal Arbitration Act (FAA). The decision in the three consolidated cases—Epic Systems Corporation v. Lewis; Ernst & Young, LLP v. Morris; and NLRB v. Murphy Oil USA, Inc.—maintains what had long been the status quo and halts the National Labor Relations Board’s (NLRB’s) crusade to invalidate mandatory class waivers. What do employers need to know about today’s monumental decision, and what adjustments can you make to capitalize on the Court’s ruling?
Unions and their allies blasted the Supreme Court for Monday’s decision allowing businesses to bar employees from filing class-action lawsuits.
“Five justices on the Supreme Court decided that it is acceptable for working people to have our legal rights taken away by corporations in order to keep our jobs,” AFL-CIO President Richard Trumka said in a written statement.
SEIU International President Mary Kay Henry agreed that the justices “made it more difficult, if not impossible, for working people to use our legal system to fight against unlawful employer policies.”
In a 5-4 ruling penned by Neil Gorsuch, the court ruled that employment contracts that forbade participation in class-action lawsuits, but instead referred such disputes to private arbitration, did not violate workers’ rights to engage in “concerted action” as defined in the 1935 National Labor Relations Act.
In a call with reporters, the AFL-CIO’s general counsel Craig Becker warned that the decision would have a “chilling effect” on employees seeking restitution for labor violations, and could “cripple enforcement of all the major employment laws,” including anti-discrimination and minimum-wage measures.
Labor advocates echoed the AFL-CIO’s fears, adding that because mandatory arbitration was typically conducted in secret, it could lead to fewer women coming forward with allegations about sexual harassment in the workplace. “The #MeToo movement has shown how crucial it is for workers to be able to voice their concerns together,” said Cathy Ruckelshaus, general counsel for the National Employment Law Project.
Monday’s ruling did not concern sexual harassment claims, and it applied only to mandatory arbitration clauses that forbade class-action lawsuits. But the ruling could well buttress legal arguments for mandatory arbitration clauses that forbid lawsuits brought by individuals, as sexual-harassment suits typically are. It would also appear to foreclose in most cases the option of litigation of future sexual-harassment violations through class actions.
The conservative justices argued that existing law did not allow the court to rule on the “respective merits of class actions and private arbitration.” Justice Ruth Bader Ginsburg called on Congress to update federal labor law to address the matter.
Rep. Bobby Scott (D-Va.), ranking member on the House Education and the Workforce committee, promised in a written statement that legislation would be introduced to “correct this injustice and strengthen workers’ rights to collective action.”
We will have additional updates on this as they become available.