A pizza delivery driver employed by Domino's Pizza franchisee Cowabunga Inc. filed a collective action under the Fair Labor Standards Act with the National Labor Relations Board. Cowabunga moved to dismiss, or in the alternative, to stay and compel arbitration based on the employment agreement's individualized arbitration clause. The day before he dismissed his FLSA lawsuit, the employee filed an unfair labor charge with the NLRB, alleging that Cowabunga violated the National Labor Relations Act by (1) prohibiting Cowabunga employees from filing collective action lawsuits and instead forcing the employees to individually arbitrate such claims, and (2) causing Cowabunga employees to reasonably believe that they were prohibited from filing unfair labor charges with the NLRB. The NLRB granted summary judgment to the employee on both claims.
Cowabunga petitioned the Eleventh Circuit for review of the NLRB panel's order. With regard to the employee's first claim, the Eleventh Circuit relied on the U.S. Supreme Court's recent decision in Epic Systems Corp. v. Lewis which held that individualized arbitration agreements do not violate the NLRA and that those agreements should be enforced as written pursuant to the FAA. With regard to the second claim, the court explained that after the NLRB panel issued its order, it refashioned its test for determining whether an employer's allegedly facially neutral policy, such as the arbitration provision here, would reasonably lead an employee to believe that he could not file an unfair labor charge with the NLRB. The Court therefore granted Cowabunga's petition for review and reversed the NLRB panel's order as to the employee's first claim and vacated and remanded the order as to the second claim. , Case No. 16-10932 (11th Cir. June 26, 2018).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.