By Ashley A.
Petefish and Nicole Bermel Dunlap
The Fifth Circuit stepped into the
ring for another round, knocking down yet another National Labor Relations
Board (NLRB) decision that class- and collective-action waivers are unlawful. Recently,
in Murphy Oil USA, Inc. v. NLRB, the
Fifth Circuit again reversed the NLRB, rejecting the board’s argument that arbitration
agreements requiring employees to waive their right to pursue class and
collective actions are unlawful. 2015 WL6457613
Previously, the Fifth Circuit, in D.R. Horton, Inc. v. NLRB, reversed
the NLRB’s position on this
precise issue. D.R. Horton, Inc., v. NLRB, 737 F.3d 344 (5th Cir. 2013). Rather than seeking certiorari review by the United States Supreme Court, the NLRB simply issued its decision in Murphy Oil less than a year later,
reaffirming its reasoning and result in D.R.
Horton. In Murphy Oil, the NLRB again
insisted that the National Labor Relations Act (NLRA) provides a substantive
right to engage in collective action and, as such, is a contrary congressional
command that precludes application of the Federal Arbitration Act (FAA), thus
prohibiting the application of class- and collective-action waivers.
The Fifth Circuit’s reversal of the
NLRB decision in Murphy Oil delivers
a hard uppercut to the board. Relying upon its earlier determinations in D.R. Horton that: the NLRA did not
contain a congressional command overriding the FAA and that the use of
class-action procedures was not a substantive right under the NLRA, the Fifth
Circuit simply stated that its decision in D.R.
Horton was issued less than two years ago and that the Fifth Circuit would
not repeat its analysis. Murphy Oil, 2015 WL6457613, at *3.
Even in the aftermath of the Fifth
Circuit’s decision in Murphy Oil decision, the
NLRB continues to assert that it is an unfair labor practice for employers to: (1) have employees sign arbitration agreements waiving their right
to bring complaints on a class or collective basis, or (2) seek the enforcement of such agreements in any forum. The Fifth’s Circuit’s recent decision and the NLRB’s insistence
on its contrary position has labor and employment law practitioners wondering
how many rounds this matchup will last before the Supreme Court is given the
opportunity to resolve the split between the NLRB and the courts.
In Murphy Oil, the petitioner also requested that the Fifth Circuit
sanction the NLRB for its blatant defiance of the Fifth Circuit’s D.R. Horton decision. However,
recognizing that the NLRB did not always know which circuit’s law would be
applied on a petition for review,*
the Fifth Circuit refused to condemn the NLRB’s nonacquiescence with D.R. Horton. Murphy Oil, 2015 WL6457613, at *4. Although the Fifth Circuit’s
decision not to sanction the NLRB may appear to give the board the opportunity
to bob and weave its argument through the other circuits, the Second, Eighth,
Ninth, and Eleventh Circuits have already implicitly or explicitly agreed with
the Fifth Circuit’s decision in D.R.
Horton. Walthour v. Chipio Windshield Repair, LLC, 745 F.3d 1326, 1336 (11th Cir. 2014), cert. denied 134 S. Ct. 2886 (2014); Richards v. Ernst & Young, LLP, 744 F.3d 1072, 1075 n.3 (9th Cir. 2013); Owen v. Bristol Care, Inc., 702 F.3d 1050, 1053–55 (8th Cir. 2013); Sutherland v. Ernst & Young LLP, 726 F.3d 290, 297 n.8 (2d Cir. 2013). Hopefully,
given these circuit court decisions, the NLRB will weigh-in for a final matchup
and seek certiorari review by the Supreme Court.
*Note: An employer can seek review of a board decision in the circuit where the unfair labor practice allegedly took place, in the United States Court of Appeals for the District of Columbia, or in any circuit in which it transacts business. 29 U.S.C. § 160(f).
