The NLRB takes a 1-in-a-million shot in another Fifth Circuit appeal regarding class arbitration waivers

So you’re telling me there’s a chance!

The Fifth Circuit Court of Appeals has twice rejected the NLRB’s position that a company commits an unfair labor practice by requiring its employees to sign an arbitration agreement that contains a class-action waiver. Even so, the Board is back before the Court pushing the same position once again in Citi Trends, Inc. v. National Labor Relations Board, App. No. 15-60913.

The Board’s position relies upon its prior rulings in D.R. Horton, Inc., 357 NLRB 2277 (2012), and Murphy Oil USA, Inc., 361 NLRB No. 72, 2014 WL 5465454 (Oct. 28, 2014). In both prior cases, the NLRB ordered the employers to abandon their arbitration provisions because they contained class action waivers, and in both cases, the Fifth Circuit refused to enforce the NLRB’s orders.

The Board seems to understand that its argument will once again be rejected by the Fifth Circuit, but it is compelled to make it in hopes that the Supreme Court will review the issue. Thus, the Board’s brief is outright apologetic, opening with an assurance to the Court that no disrespect is meant by the NLRB’s repeated requests for review of the same issue. Specifically, the Board writes:

The Board applied its D.R. Horton and Murphy Oil decisions, both of which this Court has rejected, to find that the Agreement violates Section 8(a)(1) of the NLRA. As this Court has recognized, the Board’s application of its own precedents on a nationwide basis except where bound by a contrary final judgment involving the same parties is not a gesture of disrespect but a practical necessity born of the NLRA’s venue provision. That provision provides for review in multiple forums, preventing the Board from knowing with certainty which circuit’s law will apply on review. In addition, the Board’s adherence to its precedents is necessary to establish a basis for Supreme Court review.

See NLRB’s Citi Trends Brief at p. 5 (emphasis added).

The NLRB continues:

The Board acknowledges that its decision contravenes this Court’s decisions in D.R. Horton and Murphy Oil. The Board’s policy not to automatically acquiesce to the adverse decision of a circuit court except where bound by a contrary final judgment involving the same parties does not manifest disrespect but is a practical necessity given the NLRA’s broad venue provision. That provision permits an aggrieved party to seek review “in the circuit wherein the unfair labor practice in question was alleged to have been engaged in or wherein such person resides or transacts business, or in the United States Court of Appeals for the District of Columbia . . . .” 29 U.S.C. § 160(f). As this Court recently recognized, the breadth of that provision prevents the Board from knowing with any certainty which circuit’s law will be applied on review. Murphy Oil, 808 F.3d at 1018 (citing Samuel Estreicher & Richard L. Revesz, Nonacquiescence by Federal Administrative Agencies, 98 YALE L.J. 679, 706 (1989)). For that reason, this Court has properly refused to “condemn” the Board’s refusal to acquiesce to prior circuit precedent. Id.

The Board’s adherence to its precedents on a nationwide basis while they are undergoing review in various circuits is also a practical necessity because Supreme Court review is generally available to government agencies only when there is a conflict in the circuits over an important and recurring issue. See NLRB v. Town & Country Elec., Inc., 516 U.S. 85, 88 (1995) (noting that certiorari granted to resolve conflict in circuits); Rule 10(a) of the Rules of the Supreme Court of the United States; see also Rosemary M. Collyer, The National Labor Relations Board and the Supreme Court, in LABOR LAW DEVELOPMENTS 6-5 (Southwestern Legal Foundation 1986). If the Board were required to abandon its legal position in response to contrary court decisions, it would forfeit the opportunity for “difficult issues to mature through full consideration by the courts of appeals,” E.I. du Pont de Nemours & Co. v. Train, 430 U.S. 112, 135 n.26 (1977), in order to facilitate Supreme Court review.

See NLRB’s Citi Trends Brief at pp. 8-9 (emphasis added).

By page 10 of its brief, the Board finally stops with the apologies and gets down to arguing its losing position. While there is no expectation that the Fifth Circuit would actually reverse itself, the Board has to take its shot.

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