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Labor Law Safeguards for Worker Lawsuits Imperiled at NLRB

May 14, 2019, 10:36 AM

Workers could lose a federal labor law’s protections against employer retaliation for filing lawsuits or administrative claims if the National Labor Relations Board agrees with its general counsel in a pending case involving a California construction firm.

The NLRB general counsel’s office argued that the National Labor Relations Act’s safeguards for workers’ group actions for “mutual aid or protection” don’t cover litigating any non-NLRA claims. The GC’s office based its position on the U.S. Supreme Court’s “implicit holding” that group litigation isn’t protected in Epic Systems v. Lewis, a 2018 ruling that approved class-action waivers in employment arbitration agreements.

Workers wouldn’t be totally vulnerable to employer retaliation without the protection of the NLRA, the GC’s office said. For example, the federal Fair Labor Standards Act and California’s wage law prohibit punishing workers for filing claims under those statutes, the office said.

Despite anti-retaliation provisions in most employment laws, workers still would lose an important layer of legal protection if the board were to rule that litigation isn’t a protected concerted activity—a core safeguard at the heart of federal labor law, according to lawyers and law professors. Current board law protects both jointly filed claims as well as those brought by individuals that benefit other workers.

Moreover, some labor law watchers said General Counsel Peter Robb’s bid to get litigation activities excluded from the NLRA’s protection is part of a larger campaign to narrow protected concerted activities to just those actions related to collective bargaining and union organizing. Such a move would be a serious blow to the 94 percent of the private-sector workforce that isn’t unionized, they said.

Outside of the union context, for example, the NLRA shields the Google and Facebook workers who recently protested management’s reaction to criticism of the companies and protects a wide range of workers’ social media activity, legal observers said.

“I see this as the general counsel doing real damage to the NLRA’s power and workers’ ability to get relief under the act,” said Celine McNicholas, director of government affairs and labor counsel at the left-leaning Economic Policy Institute.

Maury Baskin, a prominent labor lawyer with the management-side law firm Littler Mendelson, said in an emailed statement that “we agree with the General Counsel.”

The NLRB and the general counsel’s office didn’t respond to requests for comment.

Pre-Epic Case

The opportunity to remove the NLRA’s protections for worker litigation came to the NLRB via a case filed against a California construction firm in 2013. Tarlton and Son Inc. worker Robert Munoz challenged the validity of the company’s mandatory arbitration program. Tarlton instituted the program after Munoz and two coworkers sued the company over alleged wage law violations.

In 2015, the NLRB invalidated the arbitration program under its now-defunct case law saying that the NLRA forbids mandatory arbitration agreements that require workers to waive their rights to pursue class actions. Separately to that, the board said the arbitration program also violated labor law because it was instituted in response to Munoz’s protected concerted activity—filing a class action with other workers.

Tarlton appealed the ruling to the U.S. Court of Appeals for the Ninth Circuit. But the appeals court sent the case back to the board after the Supreme Court handed down its 5-4 ruling in Epic Systems, which said the NLRA doesn’t prevent the enforcement of class-action waivers in arbitration agreements.

Justice Neil Gorsuch penned a majority opinion that includes language suggesting a narrow interpretation of Section 7 of the NLRA—the part of the law addressing protected concerted activities.

“Section 7 focuses on the right to organize unions and bargain collectively,” Gorsuch wrote. “The notion that Section 7 confers a right to class or collective actions seems pretty unlikely when you recall that procedures like that were hardly known when the NLRA was adopted in 1935.”

Scope of Section 7

The NLRB general counsel’s office said in a two-page filing late last year that the complaint against Tarlton should be dismissed because jointly bringing a non-NLRA legal claim isn’t protected by the NLRA under the Epic Systems ruling.

The AFL-CIO responded earlier this year with a brief calling the general counsel’s assertion “reckless” and “radical.” The Supreme Court simply clarified that Section 7 doesn’t govern how group litigation proceeds in court or arbitration, the labor federation said.

“Nothing in Epic suggests that Section 7 does not protect a concerted effort by employees to invoke a court or agency’s process and protection,” the AFL-CIO said.

The high court previously said in its 1978 ruling in Eastex v. NLRB that Section 7 protects group activity to file workplace-related claims with courts and agencies, according to the labor federation.

The NLRB general counsel’s office’s response to the AFL-CIO’s brief doesn’t mention the Eastex ruling. Instead, the brief focuses on the “implicit holding” in Epic Systems that Section 7 doesn’t cover “the filing of a legal proceeding, whether or not filed individually or as a group.”

But even if Epic Systems doesn’t demand excluding litigation from Section 7, the board should do so regardless because other laws protect workers from retaliation, the GC’s office said.

Tarlton agrees with the NLRB general counsel’s position, but Munoz, the worker who brought the charge against the company, doesn’t.

“Workers would lose what’s been a historic remedy for retaliation,” said Munoz’s lawyer, David Rosenfeld of Weinberg Roger & Rosenfeld.

Gaps in Anti-Retaliation Protection

Other legal observers agreed that the NLRA remains important even with other statutory bans on retaliation.

Some conduct that non-lawyers might consider punishment for filing claims aren’t covered by the anti-retaliation provisions in other employment laws, said Charlotte Garden, a law professor at Seattle University. Although the NLRA “isn’t a panacea,” it can help catch some of those claims that could fall outside of other laws’ prohibitions on retaliation, she said.

For example, workers who were fired after bringing a racial harassment claim against their employer could lose that claim—and their retaliation claim if the judge ruled that they couldn’t have reasonably believed the harassment was severe enough to violate the law, Garden said. But the NLRA covers organizing more generally, so they could go to the NLRB and say they were fired for acting together to have a workplace free of racial harassment, she said.

The NLRB also adjudicates NLRA retaliation claims relatively quickly compared with courts handling civil claims, which can be crucial when a worker has been fired in response to filing a lawsuit, said Catherine Ruckelshaus, general counsel and legal director for the left-leaning National Employment Law Project.

Moreover, anti-retaliation provisions in employment laws aren’t universal, Ruckelshaus said. Six states lack such protections in their wage laws, for example, and another six states only prohibit retaliation when workers allege criminal wage violations, she said.

“The NLRA,” Ruckelshaus said, “is an important bulwark against retaliation.”

The case is Tarlton and Son, N.L.R.B., 32-CA-119054, General counsel’s answering brief 2/26/19.

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com