In Grant v. Convergys Corp., 2013 WL 781898 (E.D. Mo., March 1, 2013), Judge Jackson declined to enforce a class action waiver contained in an employment application because it eliminated the employees’ right to engage in collective and class litigation, which is protected concerted activity under Section 7 of the NLRA. In this case, the plaintiff sought to prosecute an FLSA collective action and a MMWL claim under Fed. R. Civ. P. 23. The Defendant moved to strike the class allegations based on the following language contained in the putative class representative’s employment application:

I further agree that I will pursue any claim or lawsuit relating to my employment with Con-vergys (or any of its subsidiaries or related enti-ties) as an individual, and will not lead, join, or serve as a member of a class or group of persons bringing such a claim or lawsuit.

Prior to filing this suit, the Plaintiff had already filed an unfair labor practice charge with the NLRB, and the administrative law judge had already held that enforcing the class waiver provision violated the NLRB as an unfair labor practice. After rejecting the Plaintiffs’ assertion of Garmon abstention and the related doctrine of primary jurisdiction (the NLRA was offered as a defense, rather than an affirmative claim) and determining the weight it should afford the NLRB’s decision (limited weight, because the opinion was still subject to review by both the NLRB and the Circuit Court of Appeals), Judge Jackson then tried to parse three competing decisions to determine the enforceability of the class waiver provision.

The Court distinguished competing decisions in D.R. Horton v. NLRB, 2012 WL 36274 (NLRB Jan. 3, 2012) and Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir. 2013), which reached opposite conclusions as to the enforceability of similar class action waiver provisions in arbitration agreements. Because both cases involved the NLRB’s interpretation of waiver clauses in the context of the Federal Arbitration Act rather than the NLRA, the District Court found these cases unhelpful. And while the third opinion in Palmer v. Convergys Corp., 2012 WL 425256 (M.D. Ga. Feb. 9, 2012) did involve an identical waiver provision in an employment contract, Judge Jackson found it “neither informative nor persuasive” due to its lack of analysis. Left to its own devices, the District Court disagreed with its Georgia sister court and denied the motion to strike and held the class waiver provision unenforceable:

For the reasons discussed above, collective and class litigation, engaged in by employees for the purposes of mutual aid and protection, is protected concerted activity under the NLRA. This Court cannot enforce a contract provision that violates the NLRA. The defendant’s waiver is such a provision, and therefore cannot be enforced.

Unlike the FAA, which prohibits under Concepcion the wholesale disregard of class waivers in arbitration agreements as void as contrary to public policy, the NLRA affords class waivers contained in employment agreements no such protection, and employers would be unwise to rely on the enforceability of such provisions in employment contracts. Unless you are in Georgia.

Post-script: In an order dated April 3, 2013, the Court denied Convergys’ motion for reconsideration, but did certify the following question for interlocutory review under 28 U.S.C. Section 1292(b):

Is the provision in defendant’s employment appli-cation containing plaintiff’s waiver of the right to bring or participate in class or collective litigation or claims against defendant unenforceable as a violation of substantive rights protected by the National Labor Relations Act, 29 U.S.C. § 151 et seq.?

In doing so, the Court recognized substantial grounds for difference of opinion based on the Palmer decision. We’ll keep an eye out for additional guidance from the Eighth Circuit.

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