Arguing that the National Labor Relations Act does not override the Federal Arbitration Act’s mandate to enforce class and collective action waivers in employment arbitration agreements
On October 2, the Supreme Court heard oral argument in these three consolidated cases, in which NELF filed an amicus brief in support of the employers, both at the certiorari stage and on the merits.. NELF argued that the Supreme Court should decide that the NLRA does not displace the FAA’s mandate to enforce class action waivers in employment arbitration agreements. The FAA is the necessary starting point here, and the FAA requires the enforcement of a class action waiver that is contained in a valid arbitration agreement. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (“The overarching purpose of the FAA . . . is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.”). The FAA’s mandate to enforce class action waivers applies equally in “claims that allege a violation of a federal statute, unless the FAA’s mandate has been ‘‘overridden by a contrary congressional command.” American Exp. Co. v. Italian Colors Restaurant, 133 S.Ct. 2304, 2309 (2013) (emphasis added) (citation and internal quotation marks omitted). In this case, the burden rests on the employees and the NLRB, as the parties opposing the class action waiver, to show that the NLRA displaces the FAA’s mandate to enforce that contract provision. See Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 227 (1987). And to meet their burden, the parties must show that “such an intent [if any] will be deducible from [the NLRA’s] text or legislative history, or from an inherent conflict between arbitration and the [NLRA’s] underlying purposes.” McMahon, 482 U.S. at 227. And even if this issue of statutory interpretation were a close one, any doubts should be resolved in favor of enforcing the class action waiver under the FAA. See CompuCredit Corp. v. Greenwood, 565 U.S. 95, 109 (2012) (Sotomayor, J., concurring) (“[W]e resolve [any] doubts in favor of arbitration.”).
The Seventh and Ninth Circuits in this consolidated case held that § 7 of the NLRA, enacted in 1935 at the height of the Great Depression, contains a “contrary congressional command” that displaces the FAA’s mandate to enforce class action waivers in employment arbitration agreements. That section protects an employee’s right to “to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157 (emphasis added).
NELF argued that neither the employees nor the NLRB can show that the NLRA displaces the FAA’s mandate to enforce class action waivers in arbitration agreements. The residual phrase “other concerted activities,” in § 7 of the NLRA, does not mean that employees have the right to join together and sue their employer. Quite to the contrary, this language simply means that employees have the right to join together in the workplace to discuss working conditions among themselves and with their employer, without having to form a union. Interpreting this catch-all phrase “other concerted activities” in isolation, as the lower courts have done, would contravene the basic canon of statutory construction that the specific governs the general. The enumerated examples of concerted activities in § 7 must limit the meaning of the residual phrase “other concerted activities” to similar conduct. And all of the enumerated examples address employees’ right to associate in the workplace in order to form a union and negotiate a collective bargaining agreement with their employer.
The lower courts’ interpretation of “other concerted activities” would also contravene the NLRA’s statement of purpose, which is to avoid “industrial strife” (such as strikes and lock-outs) by promoting “the friendly adjustment of industrial disputes,” chiefly by protecting employees’ “full freedom of association” in the workplace, so that they may achieve an “equality of bargaining power” with their employer “for the purpose of negotiating the terms and conditions of their employment . . . .” 29 U.S.C. § 151 (“Findings and declaration of policy”) (emphasis added). Clearly, the NLRA’s stated purpose is to protect employees’ freedom of association in the workplace, not in a courtroom or before an arbitrator, so that they may negotiate their differences, not litigate over them. Group legal action would be antithetical to this broad aspirational goal of achieving industrial peace through negotiation and compromise.
NELF also argued that there are other clear indications in the NLRA that Congress did not intend to endow employees with a nonwaivable right of group legal action against their employer. Most conspicuously, Congress chose the phrase “concerted activities,” as opposed to “concerted legal action” or even just “concerted action”--phrases that could entail the right to sue. When Congress wants to protect or proscribe certain conduct, it uses the word “activity,” as it has done here. But when Congress wants to create a right to sue, it generally uses the word “action,” whether by itself or in such phrases as “civil action” or “cause of action.” (And, in some instances, Congress has used both words--“activity” and “action”--in the same statutory section, precisely to distinguish between regulated conduct (the activity) and a right to sue over that regulated conduct (the action).) This point is reinforced by the fact that the NLRA does not provide employees with a private right of action against their employer. Instead, Congress saw fit to delegate exclusive enforcement powers to the NLRB to prosecute claims of unfair labor practices. See 29 U.S.C. § 160(a) (“Powers of Board generally”) (“The Board is empowered, as hereinafter provided, to prevent any person from engaging in any unfair labor practice . . . .”). It is unlikely, then, that Congress would have intended the term “other concerted activities” to include group legal action when Congress did not even allow employees to sue on their own behalf. Moreover, the NLRA was enacted in 1935, decades before the invention of the modern-day, Rule 23 class action, in 1966. Thus, it is unlikely that Congress would have considered group legal action as a form of “concerted activity” in 1935, since there was no such procedural mechanism as we now understand it.
The NLRA’s legislative history also works against the employees’ and NLRB’s position. “Concerted activity” was a loaded word with a specific historical meaning when the NLRA was enacted. In the years preceding the NLRA’s passage, workers were prosecuted under state criminal conspiracy laws, and even under the Sherman Antitrust Act, whenever they acted “in concert” in the workplace, whether to unionize or engage in any other kind of collective conduct. And so the term “concerted activities,” which appeared in two other Depression-era federal labor statutes immediately preceding the NRLA, was intended to provide affirmative legal protection to collective workplace conduct that had been sanctioned in earlier years.
Finally, NELF argued that the Seventh and Ninth Circuits’ reliance on Eastex, Inc. v. NLRB, 437 U.S. 556 (1978), is entirely misplaced. Eastex did not involve the FAA, did not involve a dispute over the NLRA’s “other concerted activities” language, and it did not involve any judicial action taken by employees. Instead, that case decided the unrelated issue whether the purpose or object of certain concerted workplace activity satisfied the NLRA’s “other mutual aid or protection” requirement. In particular, employees wanted to distribute a union newsletter in the workplace, during nonworking hours, urging employees to oppose recent legislative and executive action on wage and other work-related matters. The Court held that the political purpose of this concerted workplace activity did satisfy the “other mutual aid or protection” requirement.
On October 2, the Supreme Court heard oral argument in these three consolidated cases, in which NELF filed an amicus brief in support of the employers, both at the certiorari stage and on the merits.. NELF argued that the Supreme Court should decide that the NLRA does not displace the FAA’s mandate to enforce class action waivers in employment arbitration agreements. The FAA is the necessary starting point here, and the FAA requires the enforcement of a class action waiver that is contained in a valid arbitration agreement. AT&T Mobility LLC v. Concepcion, 563 U.S. 333, 344 (2011) (“The overarching purpose of the FAA . . . is to ensure the enforcement of arbitration agreements according to their terms so as to facilitate streamlined proceedings.”). The FAA’s mandate to enforce class action waivers applies equally in “claims that allege a violation of a federal statute, unless the FAA’s mandate has been ‘‘overridden by a contrary congressional command.” American Exp. Co. v. Italian Colors Restaurant, 133 S.Ct. 2304, 2309 (2013) (emphasis added) (citation and internal quotation marks omitted). In this case, the burden rests on the employees and the NLRB, as the parties opposing the class action waiver, to show that the NLRA displaces the FAA’s mandate to enforce that contract provision. See Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 227 (1987). And to meet their burden, the parties must show that “such an intent [if any] will be deducible from [the NLRA’s] text or legislative history, or from an inherent conflict between arbitration and the [NLRA’s] underlying purposes.” McMahon, 482 U.S. at 227. And even if this issue of statutory interpretation were a close one, any doubts should be resolved in favor of enforcing the class action waiver under the FAA. See CompuCredit Corp. v. Greenwood, 565 U.S. 95, 109 (2012) (Sotomayor, J., concurring) (“[W]e resolve [any] doubts in favor of arbitration.”).
The Seventh and Ninth Circuits in this consolidated case held that § 7 of the NLRA, enacted in 1935 at the height of the Great Depression, contains a “contrary congressional command” that displaces the FAA’s mandate to enforce class action waivers in employment arbitration agreements. That section protects an employee’s right to “to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157 (emphasis added).
NELF argued that neither the employees nor the NLRB can show that the NLRA displaces the FAA’s mandate to enforce class action waivers in arbitration agreements. The residual phrase “other concerted activities,” in § 7 of the NLRA, does not mean that employees have the right to join together and sue their employer. Quite to the contrary, this language simply means that employees have the right to join together in the workplace to discuss working conditions among themselves and with their employer, without having to form a union. Interpreting this catch-all phrase “other concerted activities” in isolation, as the lower courts have done, would contravene the basic canon of statutory construction that the specific governs the general. The enumerated examples of concerted activities in § 7 must limit the meaning of the residual phrase “other concerted activities” to similar conduct. And all of the enumerated examples address employees’ right to associate in the workplace in order to form a union and negotiate a collective bargaining agreement with their employer.
The lower courts’ interpretation of “other concerted activities” would also contravene the NLRA’s statement of purpose, which is to avoid “industrial strife” (such as strikes and lock-outs) by promoting “the friendly adjustment of industrial disputes,” chiefly by protecting employees’ “full freedom of association” in the workplace, so that they may achieve an “equality of bargaining power” with their employer “for the purpose of negotiating the terms and conditions of their employment . . . .” 29 U.S.C. § 151 (“Findings and declaration of policy”) (emphasis added). Clearly, the NLRA’s stated purpose is to protect employees’ freedom of association in the workplace, not in a courtroom or before an arbitrator, so that they may negotiate their differences, not litigate over them. Group legal action would be antithetical to this broad aspirational goal of achieving industrial peace through negotiation and compromise.
NELF also argued that there are other clear indications in the NLRA that Congress did not intend to endow employees with a nonwaivable right of group legal action against their employer. Most conspicuously, Congress chose the phrase “concerted activities,” as opposed to “concerted legal action” or even just “concerted action”--phrases that could entail the right to sue. When Congress wants to protect or proscribe certain conduct, it uses the word “activity,” as it has done here. But when Congress wants to create a right to sue, it generally uses the word “action,” whether by itself or in such phrases as “civil action” or “cause of action.” (And, in some instances, Congress has used both words--“activity” and “action”--in the same statutory section, precisely to distinguish between regulated conduct (the activity) and a right to sue over that regulated conduct (the action).) This point is reinforced by the fact that the NLRA does not provide employees with a private right of action against their employer. Instead, Congress saw fit to delegate exclusive enforcement powers to the NLRB to prosecute claims of unfair labor practices. See 29 U.S.C. § 160(a) (“Powers of Board generally”) (“The Board is empowered, as hereinafter provided, to prevent any person from engaging in any unfair labor practice . . . .”). It is unlikely, then, that Congress would have intended the term “other concerted activities” to include group legal action when Congress did not even allow employees to sue on their own behalf. Moreover, the NLRA was enacted in 1935, decades before the invention of the modern-day, Rule 23 class action, in 1966. Thus, it is unlikely that Congress would have considered group legal action as a form of “concerted activity” in 1935, since there was no such procedural mechanism as we now understand it.
The NLRA’s legislative history also works against the employees’ and NLRB’s position. “Concerted activity” was a loaded word with a specific historical meaning when the NLRA was enacted. In the years preceding the NLRA’s passage, workers were prosecuted under state criminal conspiracy laws, and even under the Sherman Antitrust Act, whenever they acted “in concert” in the workplace, whether to unionize or engage in any other kind of collective conduct. And so the term “concerted activities,” which appeared in two other Depression-era federal labor statutes immediately preceding the NRLA, was intended to provide affirmative legal protection to collective workplace conduct that had been sanctioned in earlier years.
Finally, NELF argued that the Seventh and Ninth Circuits’ reliance on Eastex, Inc. v. NLRB, 437 U.S. 556 (1978), is entirely misplaced. Eastex did not involve the FAA, did not involve a dispute over the NLRA’s “other concerted activities” language, and it did not involve any judicial action taken by employees. Instead, that case decided the unrelated issue whether the purpose or object of certain concerted workplace activity satisfied the NLRA’s “other mutual aid or protection” requirement. In particular, employees wanted to distribute a union newsletter in the workplace, during nonworking hours, urging employees to oppose recent legislative and executive action on wage and other work-related matters. The Court held that the political purpose of this concerted workplace activity did satisfy the “other mutual aid or protection” requirement.
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