NLRB Applies D.R. Horton, Strikes Class Action Waiver

RSS Feed

The National Labor Relations Board (NLRB) has issued a potentially influential ruling that extends its earlier interpretation of AT&T Wireless v. Concepcion in D.R. Horton. That decision struck an arbitration clause that included a class action waiver as a condition of employment. See D.R. Horton, 357 NLRB No. 184 (Jan. 3, 2012). Now the NLRB has held that making a class action waiver a condition of employment is an unfair labor practice, even where the waiver is not part of an arbitration clause. See Convergys Corp., 2012 NLRB LEXIS 742 (Oct. 25, 2012).

Convergys, which provides customer service support, had required all job applicants to sign a form stating that the applicants “will not lead, join, or serve as a member of a class or group of persons bringing such a claim or lawsuit.” Convergys at 2. Regardless, Convergys employee Hope Grant filed an FLSA collective action alleging that Convergys failed to pay her and similarly situated workers for essential tasks undertaken before and after their core customer service duties. Id. Convergys moved to strike any class and collective allegations pursuant to the waiver form all employees had signed as part of applying for their jobs at Convergys. Id.

In holding that the class action waiver violates the National Labor Relations Act, the NLRB identified D.R. Horton as the controlling authority, finding that “despite the fact that the D.R. Horton decision concerned a mandatory arbitration agreement, rather than a lawsuit which waived the employees’ rights to maintain a class or collective action, it is clearly dispositive of this case.” Convergys at 3. The NLRB rejected Convergys’ attempts to distinguish D.R. Horton. The fact that Grant was a job applicant rather than an employee was found to be of no consequence, both because the NLRA covers job applicants and because Grant was an employee when she filed the class action. See id.

D.R. Horton is the subject of a pending appeal in the Fifth Circuit, which rendered it “procedurally infirm,” according to Convergys, another argument that was rejected by the NRLB. See Convergys at 3, n.2. Accordingly, in addition to making clear that D.R. Horton prohibits both mandatory arbitration clauses and class action waivers as conditions of employment, Convergys underscores that D.R. Horton remains good law while the appeal works its way through the Fifth Circuit.