363 NLRB 551
Philmar Care, LLC d/b/a San Fernando Post Acute Hospital
SAN FERNANDO POST ACUTE HOSPITAL
551
363 NLRB No. 57
Philmar Care, LLC d/b/a San Fernando Post Acute
Hospital and Juan Cortes. Case 31–CA–133242
December 11, 2015
DECISION AND ORDER
BY MEMBERS MISCIMARRA, HIROZAWA,
AND MCFERRAN
On May 6, 2014, Administrative Law Judge Amita
Baman Tracy issued the attached decision. The Re-
spondent filed exceptions and a supporting brief, and the
Charging Party filed an answering brief. The General
Counsel filed exceptions and a brief in support and the
Respondent filed a brief in opposition.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions, and
to adopt the recommended Order, as modified and set
forth in full below.1
The judge found, applying the Board’s decisions in
Murphy Oil USA Inc.,2 and D. R. Horton,3 that the Re-
spondent violated Section 8(a)(1) of the Act by maintain-
ing and enforcing an arbitration provision that requires
employees, as a condition of employment, to resolve
through binding arbitration any claims “aris[ing] out of
the employment context.” The provision excludes
“claims arising under the National Labor Relations Act
. . . .” We adopt the judge’s finding that the Respondent
violated Section 8(a)(1) of the Act by maintaining and
enforcing the binding arbitration provision, but we do not
adopt her entire rationale.
Juan Cortes, the Charging Party, worked for the Re-
spondent from about September 7, 2011 through October
30, 2012. As part of his application process, Cortes
signed an “Employee Acknowledgment and Agreement,”
which states in relevant part:
I also understand that the Facility utilizes a voluntary
system for alternative dispute resolution, which in-
volves binding arbitration to resolve all disputes, which
may arise out of the employment context. Because of
the mutual benefits (such as reduced expenses and in-
creased efficiency) which private binding arbitration
can provide both the Facility and myself, I voluntarily
1 We have modified the judge’s recommended Order and substituted
a new notice consistent with this decision, and to conform to the
Board’s standard remedial language and the violations found.
2 361 NLRB 774 (2014), enf. denied in relevant part No. 14–60800,
2015 WL 6457613 (5th Cir. Oct. 26, 2015).
3 357 NLRB 2277 (2012), enf. denied in relevant part 737 F.3d 344
(5th Cir. 2013).
agree that any claim, dispute, and/or controversy [. . .]
arising from, related to, or having any relationship or
connection whatsoever with my seeking employment
with, employment by, or other association with the Fa-
cility, whether based on tort, contract, statutory, or eq-
uitable law, or otherwise (with the sole exception of
claims arising under the National Labor Relations Act
which are brought before the National Labor Relations
Board, claims for medical and disability benefits under
the California Worker’s Compensation Act, and Em-
ployment Development Office claims) shall be submit-
ted to and determined exclusively by binding arbitra-
tion under the Federal Arbitration Act.
On April 18, 2013, Cortes filed a class action wage
and hour complaint in the Los Angeles Superior Court,
on behalf of himself and all others similarly situated. On
May 9, 2014, the Respondent filed a motion to compel
arbitration and dismiss class action claims, seeking to
dismiss the case and compel Cortes to arbitrate his
claims individually. The Superior Court granted the Re-
spondent’s motion to compel and stayed the class-wide
claims. The Respondent stipulated that since May 9,
2014, it has interpreted the arbitration provision to re-
quire employees to assert covered claims in individual
arbitration.
The Respondent’s arbitration provision does not ex-
pressly address whether employees may assert a group or
class grievance in arbitration. Thus, in affirming the
violation, we do not rely on the judge’s finding that the
provision explicitly restricts Section 7 rights, or that em-
ployees would reasonably construe the provision to re-
strict Section 7 activity, under the first prong of Lutheran
Heritage Village-Livonia, 343 NLRB 646 (2004). In-
stead, relying on the motion to compel and the Respond-
ent’s subsequent interpretation of the arbitration provi-
sion to require individual binding arbitration, we find
that the Respondent has unlawfully maintained its arbi-
tration provision in violation of Section 8(a)(1) by un-
lawfully applying the arbitration provision to restrict
Section 7 activity under the third prong of Lutheran Her-
itage, 343 NLRB at 647. See Countrywide Financial
Corp., 362 NLRB 1331 (2015), and Leslie’s PoolMart,
362 NLRB 1509, 1509 fn. 3 (2015).4
4 The parties stipulated that the arbitration provision was a condition
of employment between September 2, 2011, and October 30, 2012. The
Respondent continued to maintain the provision after that date. The
General Counsel excepts to the judge’s failure to find a violation after
October 30, 2012, based on a lack of evidence as to whether the provi-
sion continued to be required as a condition of employment. The Board
has since held that an arbitration agreement that precludes collective
action in all forums is unlawful whether mandatory or not. See On
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
552
Furthermore, because the Respondent has interpreted
the arbitration provision in a way that restricts Section 7
activity and is plainly unlawful under D. R. Horton and
Murphy Oil, we adopt the judge’s finding that the Re-
spondent’s court action to enforce the unlawful interpre-
tation had an illegal objective under Bill Johnson’s5 and
violated Section 8(a)(1).
ORDER
The National Labor Relations Board orders that the
Respondent, Philmar Care, LLC d/b/a San Fernando Post
Acute Hospital, Sylmar, California, its officers, agents,
successors, and assigns, shall
1. Cease and desist from
Assignment Staffing Services, 362 NLRB 1672, 1672, 1676–1679
(2015).
The Respondent contends that because the Charging Party could
have avoided signing the arbitration provision by declining employ-
ment with Respondent and seeking employment elsewhere, its arbitra-
tion provision is voluntary and therefore does not fall within the pro-
scriptions of Murphy Oil and D. R. Horton. The claim is obviously
meritless. If the Respondent’s view were correct, the freedom of an
employee to quit and pursue employment elsewhere would be a valid
defense to many unfair labor practices.
We disagree with our dissenting colleague that arbitration agree-
ments that preclude class or collective actions do not violate the Act,
for the reasons stated in Murphy Oil, 361 NLRB 774, 774–794, and in
Bristol Farms, 363 NLRB 442 (2015). Our dissenting colleague cites
the Supreme Court’s decision in Stolt-Nielsen S.A. v. AnimalFeeds
International Corp., 559 U.S. 662 (2010), as support for his position.
But our decision today does not conflict with the principle that a “party
may not be compelled under the [Federal Arbitration Act] to submit to
class arbitration unless there is a contractual basis for concluding that
the party agreed to do so.” Id. at 684. We do not require the Respond-
ent to submit to class arbitration. Instead, we apply the rule of Murphy
Oil and D. R. Horton: an employer may not preclude collective action
in all forums, judicial and arbitral, as the Respondent did here. See
Countrywide Financial, supra, slip op. at 4.
5 See Bill Johnson’s Restaurants v. NLRB, 461 U. S. 731, 747 (1983)
(“If a violation is found, the Board may order the employer to reim-
burse the employees whom he had wrongfully sued for their attorneys’
fees and other expenses” as well as “any other proper relief that would
effectuate the policies of the Act.”). Consistent with our decision in
Murphy Oil, supra, 794, and Countrywide Financial Corp., 362 NLRB
1331 (2015), we amend the judge’s remedy and shall order the Re-
spondent to reimburse Juan Cortes for all reasonable expenses and legal
fees, with interest, incurred in opposing the Respondent’s unlawful
motion in the Superior Court of California, City of Los Angeles, to
compel individual arbitration of his class or collective claims. Interest
shall be computed in the manner prescribed in New Horizons, 283
NLRB 1173 (1987), compounded daily as prescribed in Kentucky River
Medical Center, 356 NLRB 6 (2010). See Teamsters Local 776 (Rite
Aid), 305 NLRB 832, 835 fn. 10 (1991) (“[I]n make-whole orders for
suits maintained in violation of the Act, it is appropriate and necessary
to award interest on litigation expenses”), enfd. 973 F.2d 230 (3d Cir.
1992).
We also amend the judge’s remedy to order the Respondent to notify
the court that it has rescinded or revised the arbitration provision and to
inform the court that it no longer opposes Juan Cortes’ lawsuit on the
basis of the arbitration provision.
(a) Maintaining and/or enforcing an arbitration provi-
sion that requires employees as a condition of employ-
ment to waive the right to maintain class or collective
actions in all forums, whether arbitral or judicial.
(b) In any like or related manner interfering with, re-
straining, or coercing employees in the exercise of rights
guaranteed by Section 7 of the Act.
2. Take the following affirmative action necessary to
effectuate the policies of the Act.
(a) Rescind the arbitration provision in all of its forms,
or revise it in all of its forms to make clear to employees
that the arbitration provision does not constitute a waiver
of their right to maintain employment-related joint, class,
or collective actions in all forums.
(b) Notify all current and former employees who were
required to sign or otherwise become bound to the man-
datory arbitration provision in any form that it has been
rescinded or revised and, if revised, provide them a copy
of the revised provision.
(c) Notify the Superior Court of California, City of Los
Angeles, in Case No. BC 506333, that it has rescinded or
revised the mandatory arbitration provision upon which
it based its motion to dismiss and compel individual arbi-
tration of the claims of Juan Cortes, and inform the court
that it no longer opposes the lawsuit on the basis of that
provision.
(d) In the manner set forth in this decision, reimburse
Juan Cortes and any other plaintiffs in Case No. BC
506333 for any reasonable attorneys’ fees and litigation
expenses that he may have incurred in opposing the Re-
spondent’s motion to compel individual arbitration.
(e) Within 14 days after service by the Region, post at
its facility in Sylmar, California, copies of the attached
notice marked “Appendix.”6 Copies of the notice, on
forms provided by the Regional Director for Region 31,
after being signed by the Respondent’s authorized repre-
sentative, shall be posted by the Respondent and main-
tained for 60 consecutive days in conspicuous places,
including all places where notices to employees are cus-
tomarily posted. In addition to physical posting of paper
notices, the notices shall be distributed electronically,
such as by email, posting on an intranet or an internet
site, and/or other electronic means, if the Respondent
customarily communicates with its employees by such
means. Reasonable steps shall be taken by the Respond-
ent to ensure that the notices are not altered, defaced, or
covered by any other material. If the Respondent has
6 If this Order is enforced by a judgment of a United States court of
appeals, the words in the notices reading “Posted by Order of the Na-
tional Labor Relations Board” shall read “Posted Pursuant to a Judg-
ment of the United States Court of Appeals Enforcing an Order of the
National Labor Relations Board.”
SAN FERNANDO POST ACUTE HOSPITAL 553
gone out of business or closed the facility involved in
these proceedings, the Respondent shall duplicate and
mail, at its own expense, a copy of the notice to all cur-
rent employees and former employees employed by the
Respondent at any time since May 9, 2014, and any cur-
rent or former employees against whom the Respondent
has enforced its mandatory arbitration agreement since
May 9, 2014.
(f) Within 21 days after service by the Region, file
with the Regional Director for Region 31 a sworn certifi-
cation of a responsible official on a form provided by the
Region attesting to the steps that the Respondent has
taken to comply.
MEMBER MISCIMARRA, dissenting.
In this case, the Respondent required employees to
sign an “Employee Acknowledgment and Agreement”
(Agreement) that provided for the arbitration of non-
NLRA employment-related claims. The Agreement
made no mention of group or class arbitration. Charging
Party Juan Cortes signed the Agreement and later filed a
class action lawsuit against the Respondent in State court
alleging wage and hour claims. In reliance on the
Agreement, the Respondent filed a motion to compel
arbitration of Cortes’ individual claims. The court grant-
ed the motion.1
My colleagues find that that the Agreement violates
Section 8(a)(1) of the National Labor Relations Act (the
Act or NLRA) under Lutheran Heritage Village–
Livonia2 on the basis that the Respondent applied the
Agreement to require individual arbitration. In other
words, it applied the Agreement as a waiver of class-type
treatment of non-NLRA claims.3 My colleagues further
1 The parties attached the court’s order to the Joint Stipulation of
Facts as Exh. E. The court granted the motion to compel arbitration of
Cortes’ claims, except for his cause of action under the California Pri-
vate Attorneys General Act of 2004 (PAGA). The court did not pass on
whether the arbitration was to proceed on a class or individual basis,
finding that to be a question of contract interpretation for the arbitrator
to decide.
2 343 NLRB 646 (2004).
3 My colleagues rely on the Board’s holding in Lutheran Heritage,
which is sometimes referred to as Lutheran Heritage “prong three,”
that a policy, work rule or other provision will be unlawful if it “has
been applied to restrict the exercise of Section 7 rights.” Id. at 647.
This differs from another holding in Lutheran Heritage, sometimes
referred to as Lutheran Heritage “prong one,” under which a policy,
work rule or other provision is invalidated if “employees would reason-
ably construe the language to prohibit Section 7 activity.” Id. I have
expressed disagreement with Lutheran Heritage prong one, and I advo-
cate that the Board formulate a different standard in an appropriate
future case regarding facially neutral policies, work rules, and hand-
book provisions. See, e.g., Lily Transportation Corp., 362 NLRB 406,
406 fn. 3 (2015); Conagra Foods, Inc., 361 NLRB 944, 994 fn. 2
(2014); Triple Play Sports Bar & Grille, 361 NLRB 308, 317 fn. 3
find unlawful the Respondent’s enforcement of the
Agreement by filing a motion to compel arbitration. I
respectfully dissent from these findings for the reasons
explained in my partial dissenting opinion in Murphy Oil
USA, Inc.4
I agree that an employee may engage in “concerted”
activities for “mutual aid or protection” in relation to a
claim asserted under a statute other than NLRA.5 How-
ever, Section 8(a)(1) of the Act does not vest authority in
the Board to dictate any particular procedures pertaining
to the litigation of non-NLRA claims, nor does the Act
render unlawful agreements in which employees waive
class type treatment of non-NLRA claims. To the con-
trary, as discussed in my partial dissenting opinion in
Murphy Oil, NLRA Section 9(a) protects the right of
every employee as an “individual” to “present” and “ad-
just” grievances “at any time.”6 This aspect of Section
9(a) is reinforced by Section 7 of the Act, which protects
each employee’s right to “refrain from” exercising the
(2014), affd. sub nom. Three D, LLC v. NLRB, Nos. 14–3284, –3814,
2015 WL 6161477 (2d Cir. Oct. 21, 2015). In the instant case, for the
reasons noted in the text, I disagree with my colleagues’ finding in
reliance on Lutheran Heritage prong three that the Employee Ac-
knowledgment and Agreement has been unlawfully “applied to restrict
the exercise of Section 7 rights.”
4 361 NLRB 7743, 795–808 (2014) (Member Miscimarra, dissenting
in part). The Board majority’s holding in Murphy Oil invalidating
class-action waiver agreements was recently denied enforcement by the
Court of Appeals for the Fifth Circuit. Murphy Oil USA, Inc. v. NLRB,
No. 14-60800, 2015 WL 6457613 (5th Cir. Oct. 26, 2015).
5 I agree that non-NLRA claims can give rise to “concerted” activi-
ties engaged in by two or more employees for the “purpose” of “mutual
aid or protection,” which would come within the protection of NLRA
Sec. 7. See Murphy Oil, 361 NLRB 774, 796–798 (Member Miscimar-
ra, dissenting in part). However, the existence or absence of Sec. 7
protection does not depend on whether non-NLRA claims are pursued
as a class or collective action, but on whether Sec. 7’s statutory re-
quirements are met—an issue separate and distinct from whether an
individual employee chooses to pursue a claim as a class or collective
action. Id.; see also Beyoglu, 362 NLRB 1238, 1241–1242 (2015)
(Member Miscimarra, dissenting).
6 Murphy Oil, above, at 803–807 (Member Miscimarra, dissenting in
part). Sec. 9(a) states: “Representatives designated or selected for the
purposes of collective bargaining by the majority of the employees in a
unit appropriate for such purposes, shall be the exclusive representa-
tives of all the employees in such unit for the purposes of collective
bargaining in respect to rates of pay, wages, hours of employment, or
other conditions of employment: Provided, That any individual employ-
ee or a group of employees shall have the right at any time to present
grievances to their employer and to have such grievances adjusted,
without the intervention of the bargaining representative, as long as the
adjustment is not inconsistent with the terms of a collective-bargaining
contract or agreement then in effect: Provided further, That the bargain-
ing representative has been given opportunity to be present at such
adjustment” (emphasis added). The Act’s legislative history shows that
Congress intended to preserve every individual employee’s right to
“adjust” any employment-related dispute with his or her employer. See
Murphy Oil, above, at 804–805 (Member Miscimarra, dissenting in
part).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
554
collective rights enumerated in Section 7.7 Thus, I be-
lieve it is clear that (i) the NLRA creates no substantive
right for employees to insist on class-type treatment of
non-NLRA claims;8 (ii) a class-waiver agreement per-
taining to non-NLRA claims does not infringe on any
NLRA rights or obligations, which has prompted the
overwhelming majority of courts to reject the Board’s
position regarding class waiver agreements;9 and (iii)
enforcement of a class action waiver as part of an arbitra-
tion agreement is also warranted by the Federal Arbitra-
tion Act (FAA).10 Although questions may arise regard-
ing the enforceability of particular agreements that waive
class or collective litigation of non-NLRA claims, I be-
lieve these questions are exclusively within the province
of the court or other tribunal that, unlike the NLRB, has
jurisdiction over such claims.
Because I believe the Respondent’s Agreement, as ap-
plied, was lawful under the NLRA, I would find it was
similarly lawful for the Respondent to file a motion in
State court seeking to enforce the Agreement.11 It is rel-
7 My colleagues note that the record is unclear whether the Agree-
ment was a condition of employment after Charging Party Cortes left
his employment on October 30, 2012. To the extent the Agreement
was thereafter voluntary, the legality of the Agreement is even more
self-evident. See Bristol Farms, 363 NLRB 442, 447 (2015) (Member
Miscimarra, dissenting).
8 When courts have jurisdiction over non-NLRA claims that are po-
tentially subject to class treatment, the availability of class-type proce-
dures does not rise to the level of a substantive right. See D.R. Horton,
Inc. v. NLRB, 737 F.3d 344, 362 (5th Cir. 2013) (“The use of class
action procedures . . . is not a substantive right.”) (citations omitted),
petition for rehearing en banc denied No. 12-60031 (5th Cir. 2014);
Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 332 (1980)
(“[T]he right of a litigant to employ Rule 23 is a procedural right only,
ancillary to the litigation of substantive claims.”).
9 The Fifth Circuit has twice denied enforcement of Board orders in-
validating a mandatory arbitration agreement that waived class-type
treatment of non-NLRA claims. See Murphy Oil USA, Inc. v. NLRB,
above; D. R. Horton, Inc. v. NLRB, above. The overwhelming majority
of courts considering the Board’s position have likewise rejected it.
See Murphy Oil, 361 NLRB 774, 807 (Member Miscimarra, dissenting
in part); id., at 810 fn. 5 (Member Johnson, dissenting) (collecting
cases); see also Patterson v. Raymours Furniture Co., No. 14-CV-5882
(VEC), 2015 WL 1433219 (S.D.N.Y. Mar. 27, 2015); Nanavati v.
Adecco USA, Inc., No. 14-CV-04145-BLF, 2015 WL 1738152 (N.D.
Cal. Apr. 13, 2015), motion to certify for interlocutory appeal denied
2015 WL 4035072 (N.D. Cal. June 30, 2015); Brown v. Citicorp Credit
Services, Inc., No. 1:12-cv-00062-BLW, 2015 WL 1401604 (D. Idaho
Mar. 25, 2015) (granting reconsideration of prior determination that
class waiver in arbitration agreement violated NLRA).
10 For the reasons expressed in my Murphy Oil partial dissent, and
those thoroughly explained in former Member Johnson’s dissent in
Murphy Oil, the FAA requires that the arbitration agreement be en-
forced according to its terms. Murphy Oil, above, slip op. at 34 (Mem-
ber Miscimarra, dissenting in part); id., slip op. at 49–58 (Member
Johnson, dissenting).
11 The Board’s unfair labor practice finding based on the Respond-
ent’s application of the Agreement—which was silent regarding class
arbitration—is particularly troublesome, since the Respondent applied
evant that the State court that had jurisdiction over the
non-NLRA claims granted the Respondent’s motion to
compel arbitration. That the Respondent’s motion was
reasonably based is also supported by the multitude of
court decisions that have enforced similar agreements.12
As the Fifth Circuit recently observed after rejecting (for
the second time) the Board’s position regarding the legal-
ity of class waiver agreements: “[I]t is a bit bold for [the
Board] to hold that an employer who followed the rea-
soning of our D. R. Horton decision had no basis in fact
or law or an ‘illegal objective’ in doing so. The Board
might want to strike a more respectful balance between
its views and those of circuit courts reviewing its or-
ders.”13 I also believe that any Board finding of a viola-
tion based on the Respondent’s meritorious State court
motion to compel arbitration would improperly risk in-
fringing on the Respondent’s rights under the First
Amendment’s Petition Clause. See Bill Johnson’s Res-
taurants v. NLRB, 461 U.S. 731 (1983); BE & K Con-
struction Co. v. NLRB, 536 U.S. 516 (2002); see also my
partial dissent in Murphy Oil, above, 361 NLRB 774,
806–808. Finally, for similar reasons, I believe the
Board cannot properly require the Respondent to reim-
burse the Charging Party for its attorneys’ fees in the
circumstances presented here. Murphy Oil, above, 361
NLRB 774, 808.
Accordingly, I respectfully dissent.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
the Agreement in the manner required by the Supreme Court’s interpre-
tation of the FAA. In Stolt-Nielsen S.A. v. Animal Feeds International
Corp., 559 U.S. 662 (2010), the Court wrote:
[A] party may not be compelled under the FAA to submit to class ar-
bitration unless there is a contractual basis for concluding that the par-
ty agreed to do so. . . . An implicit agreement to authorize class-action
arbitration . . . is not a term that the arbitrator may infer solely from the
fact of the parties’ agreement to arbitrate. This is so because class-
action arbitration changes the nature of arbitration to such a degree
that it cannot be presumed the parties consented to it by simply agree-
ing to submit their disputes to an arbitrator.
Id. at 684–685 (emphasis in original). There is no basis in the plain
language of the Agreement to conclude that the Respondent had agreed
to class arbitration. Thus, the Respondent’s motion to compel Cortes to
arbitrate his claims individually was well-founded in the FAA as au-
thoritatively interpreted by the Supreme Court.
12 See, e.g., Murphy Oil, Inc., USA v. NLRB, above; Johnmoham-
madi v. Bloomingdale’s, 755 F.3d 1072 (9th Cir. 2014); D. R. Horton,
Inc. v. NLRB, above; Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th
Cir. 2013); Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir.
2013).
13 Murphy Oil USA, Inc. v. NLRB, above, at 779.
-
SAN FERNANDO POST ACUTE HOSPITAL 555
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated Federal labor law and has ordered us to post and obey
this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on
your behalf
Act together with other employees for your bene-
fit and protection
Choose not to engage in any of these protected
activities.
WE WILL NOT maintain and/or enforce an arbitration
provision that as a condition of employment requires our
employees to waive the right to maintain class or collec-
tive actions for employment-related claims in all forums,
arbitral or judicial.
WE WILL NOT in any like or related manner interfere
with, restrain, or coerce you in the exercise of rights
listed above.
WE WILL rescind the arbitration provision in all of its
forms or revise it in all of its forms to make clear that the
arbitration provision does not constitute a waiver of your
right to maintain employment-related joint, class, or col-
lective actions in all forums.
WE WILL notify all current and former employees who
were required to sign or otherwise become bound to the
arbitration provision in all of its forms that the provision
has been rescinded or revised and, if revised, WE WILL
provide them a copy of the revised provision.
WE WILL notify the Superior Court of California, City
of Los Angeles, that we have rescinded or revised the
arbitration provision upon which we based our motion to
dismiss and compel individual arbitration of the claims
of Juan Cortes, and inform the court that we no longer
oppose collective action on the basis of that provision.
WE WILL reimburse Juan Cortes and any other plain-
tiffs in Case No. BC 506333 for any reasonable attor-
neys’ fees and litigation expenses that he may have in-
curred in opposing the Respondent’s motion to compel
individual arbitration.
PHILMAR CARE, LLC D/B/A SAN FERNANDO
POST ACUTE HOSPITAL
The
Board’s
decision
can
be
found
at
www.nlrb.gov/case/31–CA–133242 or by using the QR
code below. Alternatively, you can obtain a copy of the
decision from the Executive Secretary, National Labor Re-
lations Board, 1015 Half Street, S.E., Washington, D.C.
20570, or by calling (202) 273-1940.
Rudy L. Fong Sandoval, Esq., for the General Counsel.
Jeffrey S. Ranen, Esq. and William C. Sung, Esq., for the Re-
spondent.
Daniel J. Bass, Esq. and Matthew J. Matern, Esq., for the
Charging Party.
DECISION
STATEMENT OF THE CASE
AMITA BAMAN TRACY, Administrative Law Judge. This case
is before me on the parties’ March 6, 2015 joint motion to
transfer proceedings to the Division of Judges and stipulation of
the facts and issues presented (hereinafter, Joint Motion), which
I approved on March 9, 2015 (Jt. Exh. 1).1 Juan Cortes (Charg-
ing Party or Cortes) filed the charge, first-amended charge, and
second-amended charge in Case 31–CA–133242 on July 21,
2014, September 9, 2014, and November 5, 2014, respectively.
The General Counsel issued the complaint (the complaint) on
November 25, 2014.
The complaint alleges that Philmar Care, LLC d/b/a San
Fernando Post Acute Hospital (Respondent or the Facility)
violated Section 8(a)(1) of the National Labor Relations Act
(the Act) by requiring its employees, as a condition of employ-
ment, since at least September 2011 to sign agreements that
compel the employees to mandatory binding arbitration. The
complaint further alleges that Respondent violated Section
8(a)(1) of the Act since at least May 9, 2014, when it asserted
the mandatory arbitration agreement in litigation the Charging
Party brought against it.
Respondent filed a timely answer on December 9, 2014.
On the stipulated record, and after considering the briefs
filed by the General Counsel and Respondent,2 I make the fol-
lowing3
1 Abbreviations used in this decision are as follows: “Jt. Exh.” for
Joint Exhibit; “Exh.” for exhibit; “GC Br.” for the General Counsel’s
brief; and “R. Br.” for the Respondent’s brief.
2 The Charging Party filed a notice of joinder supporting the General
Counsel’s positions in his brief, and therefore, did not file a separate
brief in this matter.
3 Although I have included several citations to the record to highlight
particular stipulations or exhibits, I emphasize that my findings and
conclusions are based not solely on the evidence specifically cited, but
rather are based on my review and consideration of the entire record.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
556
FINDINGS OF FACT
I. JURISDICTION
At all times material, Respondent, a California limited liabil-
ity company, operates a skilled nursing facility providing inpa-
tient medical care in the State of California from its office and
place of business in Sylmar, California, where it annually de-
rives gross revenues in excess of $250,000. Respondent pur-
chased and received goods at its facility in California valued in
excess of $5000 directly from sources outside the State of Cali-
fornia. Respondent admits and I find that it is an employer
engaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act, and has been a health care institution within
the meaning of Section 2(14) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
A. Arbitration Provision
Since at least September 2011, Respondent maintains a poli-
cy at its Facility titled, “Employee Acknowledgment and
Agreement.” The “Employee Acknowledgment and Agree-
ment” begins by an acknowledgment that the employee has
received a copy of the Facility’s handbook and will familiarize
himself with the content. Along with acknowledging the terms
and conditions of employment, the “Employee Acknowledg-
ment and Agreement” contain a provision that require employ-
ees’ employment-related claims to be submitted to binding
arbitration (hereinafter, “arbitration provision”), which in rele-
vant part states:
I also understand that the Facility utilizes a voluntary system
for alternative dispute resolution, which involves binding arbi-
tration to resolve all disputes, which may arise out of the em-
ployment context. Because of the mutual benefits (such as
reduced expenses and increased efficiency) which private
binding arbitration can provide both the Facility and myself, I
voluntarily agree that any claim, dispute, and/or controver-
sy[. . .]which would otherwise require or allow resort to any
court of other governmental dispute resolution forum between
myself and the Facility [. . .] arising from, related to, or having
any relationship or connection whatsoever with my seeking
employment with, employment by, or other association with
the Facility, whether based on tort, contract, statutory, or equi-
table law, or otherwise (with the sole exception of claims aris-
ing under the National Labor Relations Act which are brought
before the National Labor Relations Board […]) shall be
submitted to and determined exclusively by binding arbitra-
tion under the Federal Arbitration Act [. . .].
[. . .]
I UNDERSTAND BY VOLUNTARILY AGREEING TO
THIS BINDING ARBITRATION PROVISION, BOTH I
AND THE FACILITY GIVE UP OUR RIGHTS TO TRIAL
BY JURY.
I understand that this voluntary alternative dispute resolution
program covers claims of discrimination and harassment un-
der Title VII of the Civil Rights Act of 1964, as amended. By
marking the box to the right, I elect to waive the benefits of
arbitrating Title VII claims. [.]
[. . .]
MY SIGNATURE BELOW ATTESTS TO THE FACT
THAT I HAVE READ, UNDERSTAND, AND AGREE TO
BE LEGALLY BOUND TO ALL OF THE ABOVE
TERMS.
[Jt. Exh.1 at Exh. A.]
From September 2, 2011, through October 30, 2012, as a
condition of employment, Respondent instructed employees to
sign the “Employee Acknowledgment and Agreement,” includ-
ing the arbitration provision (Jt. Exh. 1).
B. The Charging Party’s Employment with Respondent
Respondent employed the Charging Party from September 7,
2011, until October 30, 2012. On or about September 7, 2011,
the Charging Party signed the “Employee Acknowledgment
and Agreement” as part of Respondent’s application process.
By signing the “Employee Acknowledgment and Agreement,”
the Charging Party became bound by its terms.
C. The Class Action Lawsuit
On April 18, 2013, the Charging Party filed a class action
complaint against Respondent in the Superior Court of Califor-
nia, City of Los Angeles, in “Juan Cortes, an individual, on
behalf of himself and all others similarly situated, Plaintiff,”
Case No. BC 506333 (the lawsuit) (Jt. Exh. 1 at Exh. B).
Since at least May 9, 2014, Respondent maintained and en-
forced the arbitration provision in its “Employee Acknowledg-
ment and Agreement” by filing in response to the lawsuit a
“Motion to Compel Arbitration and to Dismiss Class Action
Claims” (Motion to Compel). The Motion to Compel moves
the Superior Court of California to compel the Charging Party
to individually arbitrate the class action wage and hour claims
against Respondent (Jt. Exh. 1 at Exh. C). Respondent, since at
least May 9, 2014, interprets its “Employee Acknowledgment
and Agreement,” which is silent on class and representative
actions, as requiring individual arbitration and does not permit
class wide arbitration (Jt. Exh. 1 at Exh. C).
On July 18, 2014, the Charging Party filed an Opposition to
Respondent’s Motion to Compel (Jt. Exh. 1 at Exh. D). On
August 15, 2014, the Superior Court granted Respondent’s
Motion to Compel and stayed the Charging Party’s class-wide
claims (Jt. Exh. 1 at Exh. E).
III. ANALYSIS
In the joint motion, the parties agreed to the following issues:
(1)(a) Did Respondent violate Section 8(a)(1) by maintaining
and enforcing its mandatory arbitration provision, which it
required employees to sign as a condition of employment, as
alleged in the complaint, by filing its May 9, 2014 Motion to
Compel Charging Party Cortes to individually arbitrate class
wage and hour claims?
(1)(b) Did Respondent violate Section 8(a)(1) by maintaining
and enforcing its mandatory arbitration provision, as alleged in
the complaint, by filing its May 9, 2014 Motion to Compel
Charging Party Cortes to individually arbitrate class wage and
hour claims, even if employees were not required to sign the
arbitration provision as a condition of employment?
SAN FERNANDO POST ACUTE HOSPITAL 557
A. From September 2, 2011, through October 30, 2012, Re-
spondent’s Arbitration Provision Violated Section 8(a)(1) of
the Act
The complaint alleges, at paragraph 5, that since at least ear-
ly September 2011, Respondent has required employees, as a
condition of employment, to be bound by the mandatory arbi-
tration provision within the “Employee Acknowledgment and
Agreement” which Respondent interprets to require individual
arbitration in violation of Section 8(a)(1).
In contrast to paragraph 5 in the complaint, the parties stipu-
lated that from September 2, 2011, through October 30, 2012,
as a condition of employment, Respondent required employees
to sign the “Employee Acknowledgment and Agreement”
which also contains the arbitration provision (Jt. Exh. 1). I find
that even though the arbitration provision states that it is “vol-
untary,” from September 2, 2011, through October 30, 2012, it
was a mandatory rule imposed by Respondent, and as such the
arbitration provision should be evaluated in the same manner as
any workplace rule. See D. R. Horton, 357 NLRB 2277, 2291.
Although Respondent continues to maintain the “Employee
Acknowledgment and Agreement” with the arbitration provi-
sion, from October 30, 2012, to the present, the General Coun-
sel failed to present sufficient evidence as to whether the arbi-
tration provision continued to be a mandatory condition of
employment imposed on Respondent’s employees, and thus, I
do not find a violation of maintenance of the arbitration provi-
sion after October 30, 2012.
Section 8(a)(1) of the Act provides that it is an unfair labor
practice for an employer to interfere with, restrain, or coerce
employees in the exercise of the rights guaranteed in Section 7
of the Act. The rights guaranteed in Section 7 include the right
“to form, join or assist labor organizations, to bargain collec-
tively through representatives of their own choosing, and to
engage in other concerted activities for the purpose of collec-
tive bargaining or other mutual aid or protection . . . .” The
Board has consistently held that collective legal action involv-
ing wages, hours, and/or working conditions is protected con-
certed activity under Section 7. See, e.g., Spandsco Oil & Roy-
alty Co., 42 NLRB 942, 949–950 (1942); United Parcel Ser-
vice, 252 NLRB 1015, 1018, 1022 fn. 26 (1980), enfd. 677 F.2d
421 (6th Cir. 1982); D. R. Horton, Inc., 357 NLRB 2277
(2012), enfd. denied in part 737 F.3d 344 (5th Cir. 2013), peti-
tion for rehearing en banc denied (5th Cir. No. 12–60031, April
16, 2014). In Murphy Oil USA, Inc., 361 NLRB 774 (2014),
the Board reaffirmed its ruling in D. R. Horton, where they held
that mandatory arbitration agreements which preclude the filing
of joint, class, or collective claims addressing wages, hours, or
other working conditions in any forum, arbitral or judicial, is
protected concerted activity and unlawfully restrict employees’
Section 7 rights, which violates Section 8(a)(1) of the Act. See
also Cellular Sales of Missouri, LLC, 362 NLRB 241 (2015)
(work rule reasonably construed to interfere with ability to file
charges with the Board even if rule did not expressly prohibit
access to the Board); Chesapeake Energy Corp., 362 NLRB
681 (2015).
Since the Board’s issuance of D. R. Horton there have been
several decisions issued by the Federal courts of appeal disa-
greeing with the Board’s analysis regarding mandatory arbitra-
tion agreements. Sutherland v. Ernst & Young, 726 F.3d 290
(2d Cir. 2013); Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th
Cir. 2013); Richards v. Ernst & Young, LLP, 744 F.3d 1072
(9th Cir. 2013). However, the Board in Murphy Oil reexamined
D. R. Horton, and determined that its reasoning and results
were correct. The Board found that Section 8(a)(1) of the Act
is violated when an employer requires its employees to agree to
resolve all employment-related claims through individual arbi-
tration. Mandatory arbitration agreements which bar employ-
ees from bringing joint, class, or collective actions regarding
the workplace in any forum restrict employees’ substantive
right established by Section 7 of the Act to improve their work-
ing conditions through administrative and judicial litigation.
When evaluating whether a rule, including a mandatory arbi-
tration provision, violates Section 8(a)(1), the Board applies the
test set forth in Lutheran Heritage Village-Livonia, 343 NLRB
646 (2004). See U-Haul Co. of California, 347 NLRB 375, 377
(2006), enfd. 255 Fed.Appx. 527 (D.C. Cir. 2007); D. R. Hor-
ton, Inc.; Murphy Oil; Cellular Sales. Under Lutheran Herit-
age, the first inquiry is whether the rule explicitly restricts ac-
tivities protected by Section 7. If it does, the rule is unlawful.
If it does not, the violation is dependent upon a showing of one
of the following: (1) employees would reasonably construe the
language to prohibit Section 7 activity; (2) the rule was prom-
ulgated in response to [Section 7] activity; or (3) the rule has
been applied to restrict the exercise of Section 7 rights. Luther-
an Heritage, 343 NLRB at 647. The Board in D. R. Horton,
Murphy Oil, Cellular Sales, and Chesapeake Energy Corp.
found that mandatory arbitration policies expressly violate em-
ployees’ rights to engage in protected concerted activity under
the Lutheran Heritage analysis. The Board held that if an arbi-
tration policy is required as a condition of employment, then
that rule violates Section 8(a)(1) of the Act if employees would
reasonably believe the policy or rule interferes with their ability
to file a Board charge or access to the Board’s processes, even
if policy or rule does not expressly prohibit access to the Board.
Cellular Sales, supra, slip op. 1 at fn. 4.
Here, it is undisputed that Respondent’s arbitration provision
had been maintained as a condition of employment from Sep-
tember 2, 2011, through October 30, 2012, as stipulated in the
Joint Motion. On or about September 7, 2011, the Charging
Party per Respondent’s instructions signed the “Employee Ac-
knowledgment and Agreement” which included the arbitration
provision as part of Respondent’s application process. Thus, I
find that the arbitration provision was a mandatory rule im-
posed by Respondent as a condition of employment violating
Section 8(a)(1) of the Act from September 2, 2011, to October
30, 2012. See D.R. Horton, supra at 2281; Murphy Oil, supra,
at 797.
Turning to the period after October 30, 2012, the General
Counsel argues that because the “Employee Acknowledgment
and Agreement” has remained in effect since September 2011,
the evidence clearly shows that Respondent has required em-
ployees to sign it as a condition of employment (GC Br. at 10).
I disagree. After October 30, 2012, although this same “Em-
ployee Acknowledgment and Agreement,” with the arbitration
provision, continues to be in effect per the Joint Motion, the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
558
record is vague as to whether Respondent continues to require
employees to sign the “Employee Acknowledgment and
Agreement” as a condition of employment. Moreover, alt-
hough the arbitration policy states that it is “voluntary,” the
record is silent as to how Respondent conveys to employees
how they may option out of the arbitration provision. It is pos-
sible that the “voluntariness” of Respondent’s arbitration policy
after October 30, 2012, is illusory but the Joint Motion fails to
provide necessary details to make this determination. In fact, in
D. R. Horton, supra, at 2289, the Board declined to reach the
more “difficult” issue of “whether, if arbitration is a mutually
beneficial means of dispute resolution, an employer can enter
into an agreement that is not a condition of employment with an
individual employee to resolve either a particular dispute or all
potential employment disputes through non-class arbitration
rather than litigation in court.” Thus, because the Joint Motion
lacks specificity and because the General Counsel maintains the
burden of proof, I cannot find a violation after October 30,
2012. However, I find that the arbitration provision was a
mandatory rule imposed by Respondent as a condition of em-
ployment violating Section 8(a)(1) of the Act from September
2, 2011, to October 30, 2012. See D. R. Horton, supra, at 2281;
Murphy Oil, supra, at 797.
Respondent argues that since its arbitration policy specifical-
ly excludes claims under the Act that its arbitration policy does
not violate Section 7 of the Act (R. Br. at 8–11).4 Respondent’s
arbitration provision permits limited exceptions to which dis-
putes must be resolved by binding arbitration including claims
under the National Labor Relations Act and the California
Workers’ Compensation Act, and Employment Development
Office claims (Jt. Exh. 1 at Exh. A). Despite the arbitration
provision permitting Board charges, the arbitration provision
creates an ambiguity as to whether an employee could file or
join a class or collective action, and such ambiguity must be
construed against Respondent as the drafter of the arbitration
provision. See Murphy Oil, supra, at 799. Employees subject
to the arbitration provision would reasonably construe it as
waiving their right to pursue employment-related claims con-
certedly in all forums or that their right to file an unfair labor
practice with the Board is restricted. Indeed, although the arbi-
tration provision is silent as to whether class and/or collective
actions are permitted, Respondent interprets its arbitration pro-
vision to require individual arbitration (Jt. Exh. 1; Jt. Exh. 1 at
Exh. C), thereby precluding class or collective action in both
judicial and arbitral forums. Moreover, Respondent’s arbitra-
tion policy covers all disputes arising out of the employment
context. It does not leave open any judicial forum, as required
by the Board in D. R. Horton, nor does Respondent permit
collective or class arbitration as evidenced by its Motion to
Compel. D. R. Horton, supra, at 2288.
Respondent cites to several Board decisions upholding
workplace rules, none of which concern arbitration policies,
and argues that its arbitration policy when narrowly construed
4 Respondent inappropriately raised this theory of the case for the
first time in its brief. However, because the General Counsel prevails
on this theory, the General Counsel is not prejudiced by not having the
opportunity to brief the matter.
should similarly be upheld (R. Br. at 8–11). However, the
Board has repeatedly stated that broad language in defining the
issues subject solely to arbitration is reasonably interpreted by
employees to encompass and preclude the filing of unfair labor
practice charges even if explicitly permitted. See U-Haul Co.
of California, supra at 377–378 (agreement requiring arbitra-
tion of “all disputes relating to or arising out of an employee’s
employment [. . .] or the termination of that employment,” in-
cluding “any other legal or equitable claims and causes of ac-
tion recognized by local, state, or federal law or regulations”
violated Section 8(a)(1)). Recently, in Cellular Sales, the
Board stated that Section 8(a)(1) is violated if the rule or policy
interferes with employees’ rights to file Board charges even if
the rule or policy does not expressly prohibit Board charges.
362 NLRB 241 fn. 4. Likewise, even permitting claims before
the Board, I find that Respondent’s arbitration policy violates
Section 8(a)(1) of the Act due to its broad scope in subjecting
all employment disputes to binding arbitration. Murphy Oil,
supra, at 799.
Respondent argues I should not follow Murphy Oil and D. R.
Horton. Respondent failed to provide valid arguments distin-
guishing its arbitration policy with the ones found in D. R. Hor-
ton and Murphy Oil. Because Murphy Oil and D. R. Horton are
Board precedents that have not been overturned by the Supreme
Court, I must follow them. Manor West, Inc., 311 NLRB 655,
667 fn. 43 (1993); see also Waco, Inc., 273 NLRB 746, 749 fn.
14 (1984) (“We emphasize that it is a judge’s duty to apply
established Board precedent which the Supreme Court has not
reversed. It is for the Board, not the judge, to determine wheth-
er precedent should be varied.”). The arguments made by Re-
spondent as to why D. R. Horton and Murphy Oil were wrongly
decided, including its rejection by the courts, must be made
directly to the Board.
Respondent alleges that the Board’s rationale in Murphy Oil
and D. R. Horton conflict with the FAA, 9 U.S.C. §§ 1 et. seq.
However, the Board clearly set forth its reasons why the Na-
tional Labor Relations Act does not conflict with or undermine
the FAA. See Murphy Oil, supra, at 2282. First, the Board
found that mandatory arbitration agreements are unlawful under
the FAA’s savings clause because they extinguish rights guar-
anteed by Section 7. Second, Section 7 amounts to a “contrary
congressional command” overriding the FAA. Finally, the
Board found that the Norris-LaGuardia Act indicates that the
FAA should yield to accommodate Section 7 rights. The Nor-
ris-LaGuardia Act prevents enforcement of private agreements
that prohibit individuals from participating in lawsuits arising
out of labor disputes.
Furthermore, Respondent argues that AT & T Mobility v.
Concepcion, 131 S.Ct. 1740, 1746 (2011), a Supreme Court
decision issued after D. R. Horton, and other related case law,
support the argument that D. R. Horton must be rejected.
Again, the Board in Murphy Oil addressed those arguments,
distinguishing that Section 7 of the Act substantively guaran-
tees employees the right to engage in collective action, includ-
ing collective legal action, for mutual aid and protection con-
cerning wages, hours, and working conditions. See Murphy Oil,
supra, at 2283–2284; Chesapeake Energy Corp., supra, slip op.
at 3.
SAN FERNANDO POST ACUTE HOSPITAL 559
Accordingly, I find that from September 2, 2011, through
October 30, 2012, Respondent’s maintenance of the arbitration
provision, as a mandatory condition of employment, prohibited
employees from bringing forth claims against Respondent in a
concerted manner which thereby violates Section 8(a)(1) of the
Act as set forth in D. R. Horton and Murphy Oil. I do not find a
violation after October 30, 2012, since the record is lacing suf-
ficient evidence proving that Respondent continues to impose
the arbitration provision as a mandatory rule.
B. Respondent’s Enforcement of its Arbitration Provision Vio-
lates Section 8(a)(1) of the Act
The complaint alleges, at paragraph 6, that Respondent en-
forced its arbitration provision in the Superior Court of Califor-
nia by moving the State court to dismiss the Charging Party’s
class action lawsuit. The arbitration provision is a condition of
employment, and is therefore treated in the same manner as
other unlawfully implemented workplace rules. As set forth
previously, when evaluating whether a rule, including a manda-
tory arbitration provision, violates Section 8(a)(1), the Board
applies the test set forth in Lutheran Heritage Village-Livonia,
supra. See U-Haul Co. of California, supra at 377 (2006), enfd.
255 Fed.Appx. 527 (D.C. Cir. 2007); D. R. Horton, Inc.; Mur-
phy Oil; Cellular Sales. In undertaking this analysis, the Board
must refrain from reading particular phrases in isolation, and
must not presume improper interference with employee rights.
MCPc, Inc., 360 NLRB 216, 222 (2014).
The inquiry here is whether the third prong of the Lutheran
Heritage test, if the rule has been applied to restrict the exercise
of Section 7 rights, is met. As set forth above, Respondent vio-
lated Section 8(a)(1) when it imposed the mandatory arbitration
provision which the Charging Party was required to sign as a
condition of employment. Respondent stipulated that it inter-
prets the arbitration provision only to permit individual arbitra-
tion. Respondent further stipulated that it filed a Motion to
Compel in response to the lawsuit filed by the Charging Party
arguing that the arbitration provision only permits individual
arbitration, thereby precluding class or collective action.
Thereafter, the Superior Court of California granted Respond-
ent’s Motion to Compel and stayed the Charging Party’s class-
wide claims. It is well settled that lawsuits which attempt to
enforce contract provisions or policies which violate the Act
constitute independent statutory violations. Bill Johnson’s
Restaurants, 461 U.S. 731, 737–738 fn. 5 (1983), citing Gran-
ite State Joint Board, 187 NLRB 636, 637 (1970), enf. denied
446 F. 2d 369 (1st Cir. 1971), revd. 409 U.S. 213 (1972). Ac-
cordingly, I find that Respondent’s enforcement of the arbitra-
tion provision violates the Act since Respondent interprets its
arbitration provision to preclude class or collective action. In
doing so, I find that Respondent restricted the exercise of em-
ployees’ Section 7 rights in violation of Section 8(a)(1) of the
Act.
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning of Section
2(2), (6), and (7) of the Act.
2. By requiring employees to sign and maintain, from Sep-
tember 2, 2011, through October 30, 2012, an arbitration provi-
sion within the “Employee Acknowledgment and Agreement”
under which employees are compelled, as a condition of em-
ployment, to waive the right to maintain class or collective
actions in all forums, whether arbitral or judicial, Respondent
has engaged in unfair labor practices affecting commerce with-
in the meaning of Section 2(6) and (7) of the Act, and has vio-
lated Section 8(a)(1) of the Act.
3. By enforcing the arbitration provision on May 9, 2014, at
the Facility by moving to compel individual arbitration of the
Charging Party’s class action lawsuit filed in State court, Re-
spondent violated Section 8(a)(1) of the Act.
REMEDY
Having found that Respondent has engaged in certain unfair
labor practices, I shall order it to cease and desist there from
and to take certain affirmative action designed to effectuate the
policies of the Act.
As I have concluded that the mandatory arbitration provision
is unlawful from September 2, 2011 through October 30, 2012,
the recommended Order requires that Respondent revise or
rescinds it, and advises its employees in writing that the manda-
tory arbitration provision has been revised or rescinded.
Respondent shall post a notice in all locations where the
mandatory arbitration policy, or any portion of it requiring all
and/or enumerated employment-related disputes to be submit-
ted to individual arbitration, was in effect. See, e.g., U-Haul of
California, supra, fn. 2; D. R. Horton, supra, at 2293; Murphy
Oil, supra, at 795. Respondent is also ordered to distribute
appropriate remedial notices to its employees electronically,
such as by email, posting on an intranet or internet site, and/or
other appropriate electronic means, if it customarily communi-
cates with its employees by such means. J. Picini Flooring,
356 NLRB 11 (2010).
I recommend Respondent be required to reimburse the
Charging Party and any other plaintiffs for all reasonable ex-
penses and legal fees, with interest, incurred in opposing the
lawsuit and related expenses, with interest, to date and in the
future, directly related to the Motion to Compel filed by Re-
spondent related to the plaintiff’s class action lawsuit in Juan
Cortes, an individual, on behalf of himself and all others simi-
larly situated, Case No. BC 506333. See Bill Johnson’s Res-
taurant v. NLRB, 461 U.S. 731, 747 (1983) (“If a violation is
found, the Board may order the employer to reimburse the em-
ployees whom he had wrongfully sued for their attorney’s fees
and other expenses” and “any other proper relief that would
effectuate the policies of the Act.”). Interest shall be computed
in the manner prescribed in New Horizons, 283 NLRB 1173
(1987), compounded daily as prescribed in Kentucky River
Medical Center, 356 NLRB 6 (2010). See Teamsters Local
776 (Rite Aid), 305 NLRB 832, 835 fn. 10 (1991) (“[I]n make
whole orders for suits maintained in violation of the Act, it is
appropriate and necessary to award interest on litigation ex-
penses.”), enfd. 973 F.2d 230 (3d Cir. 1992), cert. denied 507
U.S. 959 (1993).
I recommend that Respondent be required to ensure that the
Charging Party has a forum to litigate his class action lawsuit
by either: (1) withdrawing its Motion to Compel and requesting
the State court to rescind its order staying the class action por-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
560
tion of the Charging Party’s lawsuit; or (2) withdrawing its
argument to the arbitrator that the arbitration provision pre-
cludes class or collective action, and that it will proceed with
class-wide arbitration.
[Recommended Order omitted from publication.]