Patterson v. Raymours Furniture Co. ( 2016 )

15-2820-cv
Patterson v. Raymours Furniture Co.
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
CORRECTED SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY
ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER
IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN
ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING TO A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 7th day of September, two thousand sixteen.
PRESENT:
GERARD E. LYNCH,
SUSAN L. CARNEY,
Circuit Judges,
ALVIN K. HELLERSTEIN,*
District Judge.
__________________________________________
CONNIE PATTERSON, on behalf of herself
and all others similarly situated, and DAVID
AMBROSE,
Plaintiffs-Appellants,
v. No. 15-2820-cv
RAYMOURS FURNITURE COMPANY, INC.,
Defendant-Appellee.
__________________________________________
FOR APPELLANT: MICHAEL RUBIN, Altshuler Berzon
LLP, San Francisco, CA (Eric P. Brown,
*
Judge Alvin K. Hellerstein, of the United States District Court for the Southern District
of New York, sitting by designation.
Altshuler Berzon, San Francisco; Justin
M. Swartz, Outten & Golden LLP, New
York, NY on the brief).
FOR APPELLEES: DAVID M. WIRTZ, Littler Mendelson
P.C., New York, NY (Ron Chapman, Jr.,
Ogletree, Deakins, Nash, Smoak &
Stewart, P.C., Dallas, TX; Christopher C.
Murray, Ogletree, Deakins, Nash, Smoak
& Stewart, P.C., Indianapolis, IN on the
brief).
FOR AMICI CURIAE: JOEL A. HELLER, on behalf of National
Labor Relations Board, Washington, DC;
EVAN M. TAGER, Mayer Brown LLP,
Washington, DC, on behalf of The
Chamber of Commerce of the United
States of America (Andrew J. Pincus,
Archis A. Parasharami, Matthew A.
Waring, Mayer Brown LLP,
Washington, DC; Kate Comerford Todd,
Warren Postman, U.S. Chamber
Litigation Center, Washington, DC on
the brief).
Appeal from the United States District Court for the Southern District of New
York (Valerie Caproni, Judge).
UPON DUE CONSIDERATION IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the judgment of the district court is AFFIRMED.
Defendant-appellee Raymours Furniture Company, Inc. (“Raymours”) requires all
its employees, as a condition of their employment, to participate in the company’s
Employment Arbitration Program (“EAP”), which requires that employees submit all
employment and compensation-related claims to arbitration. The EAP also mandates that
2
such claims be decided on an individual basis.1 The EAP does not, however, prevent
employees from filing charges or participating in investigations conducted by the Equal
Employment Opportunity Commission and/or state or local human rights agencies, nor
does it require employees to waive any rights they might have under the National Labor
Relations Act (“NLRA”) or prevent employees from filing unfair labor practice charges
under the NLRA. Plaintiff-appellant Connie Patterson, a Raymours employee, brought
this putative class and collective action, asserting claims against Raymours under the Fair
Labor Standards Act (“FLSA”) and the New York Labor Law.2 Raymours moved to
compel arbitration pursuant to the EAP. The district court granted Raymours’s motion,
holding that the EAP’s class action waiver was enforceable. See Patterson v. Raymours
Furniture Co., 96 F. Supp. 3d 71 (S.D.N.Y. 2015). The district court rejected Patterson’s
claim that the EAP’s ban on class or collective litigation or arbitration of workplace
1
A relevant portion of the EAP’s collective action waiver reads as follows:
CAN CLAIMS BE DECIDED BY CLASS OR COLLECTIVE ACTION?
No. This section describes the “Class Action Waiver” of the Program. Claims
under this Program cannot be litigated by way of class or collective action. Nor
may Claims be arbitrated by way of a class or collective action. All Claims
between you and us must be decided individually. . . . Thus, the arbitrator shall
have no authority or jurisdiction to process, conduct or rule upon any class,
collective, private attorney general or multiple-party proceeding under any
circumstances.
(App’x 140.)
2
Plaintiff-appellant David Ambrose, a fellow employee, later joined the lawsuit as an
FLSA opt-in plaintiff.
3
grievances violated the employees’ right under the NLRA to “engage in . . . concerted
activities for the purpose of . . . mutual aid or protection.” 29 U.S.C. § 157. It held that the
Federal Arbitration Act (“FAA”) mandated arbitration of Patterson’s claims because the
plaintiffs, by accepting the EAP, had agreed to arbitrate their claims according to its
terms.
The only question presented on appeal is whether the EAP’s prohibition of class or
collective adjudication of work-related claims illegally restricts employees’ substantive
rights under the NLRA and the Norris-La Guardia Act (“NLGA”), and is unenforceable
under the FAA.3 We assume the parties’ familiarity with the underlying facts, procedural
history, specification of issues for review, and positions espoused by amici curiae.
The National Labor Relations Board (the “Board”) has squarely addressed the
issue on appeal and repeatedly concluded that Sections 7 and 8(a)(1) of the NLRA4 and
3
Appellants do not claim a right to pursue collective action in every forum or even in any
particular forum. Instead, they seem to argue that Raymours must either (a) permit class
or collective arbitration, or (b) waive the arbitral forum to the extent an employee seeks to
invoke class or collective procedures in court.
4
Section 7 of the NLRA states:
Employees shall have the right 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). Section 8(a)(1) of the NLRA states, “[i]t shall be an
unfair labor practice for an employer . . . to interfere with, restrain, or coerce employees
in the exercise of the rights guaranteed in [Section 7].” Id. § 158(a)(1).
4
Sections 2 and 3 of the NLGA5 foreclose enforcement of arbitration agreements that
waive an employee’s right to pursue legal claims in any judicial or arbitral forum on a
collective action basis. See, e.g., D.R. Horton, Inc., 357 NLRB No. 184, 2012 WL 36274
(2012) (“Horton I”); Murphy Oil USA, Inc., 361 NLRB No. 72, 2014 WL 5465454
(2014) (“Murphy Oil I”). The circuit courts, however, are irreconcilably split on the
question. The Fifth and Eighth Circuits have reversed the Board’s rulings on three
separate occasions. See D.R. Horton, Inc. v. N.L.R.B., 737 F.3d 344 (5th Cir. 2013)
(“Horton II”) (reversing Horton I); Murphy Oil USA, Inc. v. N.L.R.B., 808 F.3d 1013,
1015 (5th Cir. 2015) (reversing Murphy Oil I and noting that the “Board will not be
surprised that we adhere, as we must, to [Horton II]”); Cellular Sales of Missouri, LLC v.
N.L.R.B., 824 F.3d 772 (8th Cir. 2016); see also Owen v. Bristol Care, Inc., 702 F.3d
1050 (8th Cir. 2013). The Seventh and Ninth Circuits, on the other hand, have agreed
with the Board that clauses precluding employees from bringing, in any forum, a
5
Section 2 of the NLGA declares, as “the public policy of the United States,” that an
individual employee
shall be free from the interference, restraint, or coercion of employers of labor, or
their agents, in the designation of such representatives or in self-organization or in
other concerted activities for the purpose of collective bargaining or other mutual
aid or protection.
29 U.S.C. § 102 (emphasis added). Section 3 enforces Section 2: “any [] undertaking or
promise in conflict with the public policy declared in [Section 2] . . . shall not be
enforceable in any court of the United States and shall not afford any basis for the
granting of legal or equitable relief by any such court . . . .” Id. § 103.
5
concerted legal claim violate the NLRA, and have further held that such agreements are
unenforceable under the FAA. See Morris v. Ernst & Young, LLP, No. 13-16599, 2016
WL 4433080 (9th Cir. August 22, 2016); Lewis v. Epic Systems Corp., 823 F.3d 1147
(7th Cir. 2016).6
If we were writing on a clean slate, we might well be persuaded, for the reasons
forcefully stated in Chief Judge Wood’s and Chief Judge Thomas’s opinions in Lewis and
Morris, to join the Seventh and Ninth Circuits and hold that the EAP’s waiver of
collective action is unenforceable. But we are bound by our Court’s decision in
Sutherland v. Ernst & Young LLP, 726 F.3d 290 (2d Cir. 2013), which aligns our Circuit
on the other side of the split. In considering an alternative argument made by the plaintiff
in that case, Sutherland “decline[d] to follow the [NLRB’s] decision” in Horton I “that a
waiver of the right to pursue a FLSA claim collectively in any forum violates the
[NLRA].” Id. at 297 n.8. We are bound by that holding “until such time as [it is]
overruled either by an en banc panel of our Court or by the Supreme Court.” United
States v. Wilkerson, 361 F.3d 717, 732 (2d Cir. 2004).
6
These courts see no conflict between the NLRA and the FAA with respect to such
agreements. The saving clause of the FAA confirms that agreements to arbitrate “shall be
valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity
for the revocation of any contract.” 9 U.S.C. § 2 (emphasis added). The Seventh and
Ninth Circuits have held that an “illegal” arbitration agreement, one that is unlawful
under the NLRA, “meets the criteria of the FAA’s saving clause for nonenforcement.”
Epic Systems, 823 F.3d at 1157; see also Morris, 2016 WL 4433080, at *7 (“when an
arbitration contract professes the waiver of a substantive federal right, the FAA’s saving
clause prevents a conflict between the statutes by causing the FAA’s enforcement
mandate to yield.”).
6
Appellants’ argument that this panel is not bound by Sutherland is unpersuasive.
Although the Sutherland court rejected Horton I in a brief footnote, it unquestionably
rejected the NLRB’s analysis and embraced the Eighth Circuit’s position in Owen. The
parties in Sutherland extensively briefed their arguments under the NLRA and the
NLGA, and the panel’s rejection of those arguments was necessary to its judgment.
Appellants also argue that the Board’s more recent rulings that continue, subsequent to
Sutherland, to uphold the Board’s position have undermined the authority of Sutherland
by developing more refined arguments not addressed by our Court in that case. But such
subtleties of argument do not change the fact that the controlling question in this case was
clearly presented in Sutherland, and this Court rejected appellants’ position.
We have considered appellants’ remaining arguments and find them to be without
merit. For the reasons stated above, the judgment of the district court is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
7