The National Labor Relations Board and its associated forums continue to rule
against employers that institute overly broad policies into their employee
manuals that interfere with, coerce, or restrain its employees' exercise of
their Section 7 rights under the Act. In
this particular case, Apple American Group LLC Applebees, d/b/a
Applebees Neighborhood Grill and Bar was found to have violated the Act by implementing an
overly broad, mandatory arbitration clause/policy that was a condition of
employment and was believed that, while the rule did not explicitly restrict
Section 7 activity, employees might reasonably believe that it did.
The Case:
The ULP / Complaint:
The unfair labor practice charge was filed on April 22, 2013
by an employee alleging that Applebee’s, “issued”, “promulgated” and “maintained”
an employee handbook rule containing a mandatory arbitration clause that
would reasonably be understood by employees to prohibit them from filing
collective or class-wide legal actions against the Respondent in any forum,
whether legal or arbitral, in violation of Section 8(a)(1) of the Act.
The Specifics:
Applebees has maintained an employee handbook containing a mandatory
dispute resolution procedure. This employee handbook was distributed to
employees at all restaurants operated by Applebees.
The mandatory dispute resolution procedure consisted of two
documents:
·
"Receipt of Dispute Resolution and
Agreement to Abide by Dispute Resolution Program" ("Receipt")
·
“Dispute Resolution Program."
Since this dispute resolution procedure was introduced,
employees have been required to sign the "Receipt of Dispute Resolution
and Agreement to Abide by Dispute Resolution Program." Both the Receipt and the
Dispute Resolution Program constitute terms and conditions of employment for
employees.
Since 2008, four complaints have been filed against Applebee’s and its
subsidiaries on behalf of classes of employees alleging employment-related
violations of various state and federal statutes. In each instance, Applebees has
asserted the existence of class and collective action waivers in the
"Receipt of Dispute Resolution and Agreement to Abide by Dispute
Resolution Program" and "Dispute Resolution Program" as a
defense to the class action complaints.
In two of those
cases, the forum court has denied Applebees motions to compel individual
arbitration. In one other action for violations of the Fair Labor Standards
Act, the parties settled before a ruling was issued. In the fourth case, also
alleging violations of the Fair Labor Standards Act, Applebee’s has not yet
been served.
The Primary Issues in
this case are:
(a). Whether Applebees mandatory dispute resolution
policy would reasonably be read by employees as prohibiting them from bringing
class or collective claims in any forum, whether legal or arbitral, against
Respondent.
(b). Whether Applebees has interfered with, coerced,
or restrained its employees' exercise of their Section 7 rights, in violation
of Section 8(a)(1) of the Act, by maintaining its mandatory dispute resolution
policy.
The
Court’s Analysis:
The issue
herein is whether the Respondent’s Dispute Resolution Program (“Program”)
violates
Section 8(a)(1) of the Act.
In support of this allegation, Counsel for
the General Counsel cites D.R. Horton, 357 NLRB No. 184 (2012), where
the Board found a similar policy to violate Section 8(a)(1) of the Act.
Key Differences:
Horton precluded employees from
filing joint, class or collective claims against the employer addressing wages
and other compensation, breach of contract claims, tort claims, wrongful
termination claims, sexual or other illegal harassment or discrimination
claims, or other claims specified therein,
Applebees’s program herein specifically
provides that it does not prohibit
employees from filing workers
compensation claims, unemployment insurance claims, or claims before the Board,
any state or federal department of labor, or the United States Equal Employment
Opportunity Commission. However, unlike some recent cases, the Program does not contain an “opt out”
provision wherein employees have the right to refuse to participate in the
Program by executing an agreement, in a timely manner, setting forth their
decision to refuse to participate.
EDITOR’S
NOTE: “Opt Out” provisions are not a clear remedy as
the NLRB has determined in past cases, Mastec Services, 16-CA-86102 (June 3, 2013).
The employer’s Dispute Resolution Policy along with its accompanying Employee Acknowledgment
and Opt-Out provision were found to violate Section 8(a)(1) of the Act. The Act
grants to employees the right to engage in protected concerted activities
without interference by his/her employer. As these rights are granted by the
Act, an employer may not lawfully require its employees to affirmatively act
(opt out, in writing) in order to obtain or maintain these rights. You may read a past summary of Mastec
Services, 16-CA-86102 (June 3, 2013) here….
Counsel for the General Counsel, in his
Statement of Position, states that the Board applies the test set forth in Lutheran Heritage Village- Livonia,
343 NLRB 646 (2004), i.e., whether
the rule explicitly restricts
Section 7 activity or, even if it doesn’t, whether employees would reasonably
believe that it did, and the instant rule explicitly requires that all legal
claims of the employees must be submitted to arbitration, and “…on an
individual basis and not as a class or collective action.” Because
these provisions require employees to waive their Section 7 rights to bring
class or collective claims in any forum against the Respondent, Counsel for the
General Counsel argues that the Program’s restrictions violate Section 8(a)(1)
of the Act. The fact that the
Program specifically provides that the employees do not waive their rights to
bring actions before the Board or other governmental agencies does not change
this result, citing Horton, (at
Slip Opinion p. 6) which states: “if the Act makes it unlawful for employers to
require employees to waive their right to engage in one form of activity, it is
no defense that employees remain able to engage in other concerted activities.”
Applebees Counsel states that there is no substantive
right to class, collective or representative arbitration procedures created by
laws other than the Act, and that this matter can be distinguished from Horton as it explicitly permits employees
to file claims with the Board, departments of labor, or the EEOC; therefore the
Program does require employees to “waive the right to maintain class or
collective actions in all forums.” She further states that Horton “has been discredited by every
citable court decision in which it has been considered,” and should be here, as
well. Therefore, she argues, the Complaint should be dismissed.
In Horton,
the Board found the arbitration provision unlawful because it “clearly and expressly
bars employees from exercising substantive rights that have long been protected
by Section 7 of the NLRB.” While the courts have “discredited” the
Board’s Horton decisions, we
are bound by that decision.
Applebees Counsel made a number of arguments
to establish that Horton was
decided incorrectly in addition to arguing that this matter can be differentiated
from Horton because it permitted access to the Board. She argued that the
Complaint contravenes the Federal Arbitration Act and that class or collective
court or arbitral actions are not necessarily concerted unless the other
employees affirmatively consented to, or joined with, the complaining party.
She further argued that even if the Program prohibits employees from filing
class or collective actions, it does not limit arbitrator’s ability to
consolidate claims or issue collective relief.
The Board has already decided Horton and unless and until it
determines that Horton was incorrectly decided, or the Supreme Court so
decides, the courts are bound by that decision. As a result, Administrative Law
Judge Biblowitz found that the Respondent’s Dispute Resolution Program violated
Section 8(a)(1) of the Act.
The Takeaway
for Employers:
As we have learned in several recent NLRB cases,
overly broad policies that appear to restrict an employee’s right to engage in
concreted activities should be avoided.
Opt out and Saving Clauses simply are not an
acceptable Employer argument in the eyes of the NLRB.
Make the necessary revisions to your Employee Manuals
to avoid these potential pitfalls in the future.
The Case information can be found on the NLRB’s
website here…
The Administrative Law Judge’s Decision can be found
on the NLRB’s website here…
The Offending (8-Page)
Policy:
Respondent’s Dispute Resolution Program states as
follows:
This Dispute Resolution Program is adopted for Apple
American Group (Apple American Group LLC and Apple American Group II LLC) and
all subsidiaries or affiliated entities, and all successors and assigns of any
of them, all of which are collectively hereinafter referred to as the
"Company."
The Company is committed to building a strong
relationship between the Company and all of our employees – a relationship that
is based on trust and open communication.
The Company is an equal opportunity employer and strives to maintain an
atmosphere of mutual trust and open, honest communication. By working together,
we can reach any goal we set for ourselves. We do not and will not tolerate
harassment or discrimination by any employee, regardless of their status with
the Company, and no employee will be retaliated against for using this Program.
We understand, however, that problems and
disagreements are unavoidable when people with different viewpoints spend a lot
of time together. We cannot entirely eliminate disagreements, but we can provide
a process for resolving them when they do occur by taking prompt constructive
action.
Based on these beliefs and values, we developed this
DISPUTE RESOLUTION PROGRAM (the "Program"). The Program is a four-
step process for resolving workplace problems quickly and fairly. This policy
describes the steps that both you and the Company must take to resolve many
types of workplace problems. The Company is also obligated to follow the
Program and will also be bound by arbitration. The types of problems covered by
the Program are explained in detail in this policy.
THIS PROGRAM IS A CONDITION OF YOUR EMPLOYMENT AND IS
THE MANDATORY AND EXCLUSIVE MEANS BY WHICH DISPUTES BETWEEN YOU AND
THE COMPANY MAY BE RESOLVED, SO READ THE INFORMATION
IN THIS PROGRAM BOOKLET CAREFULLY.
When you have a work-related problem, follow the
steps listed below in this policy.
Step 1:
UTILIZE THE OPEN DOOR POLICY
In any relationship, when a disagreement occurs,
keeping emotions bottled up inside only causes the problem to get bigger. At
the Company we want to encourage open communication so we can solve the problem
with the least amount of stress for those involved. To do this, we have
developed an Open-Door Policy that encourages you to talk with your manager to
get your concerns addressed quickly.
1. Talk
directly to your immediate manager. If you have a problem, first discuss it
with your Manager or General Manager as soon as possible after the problem
arises.
2. Talk to a
higher level of management. Sometimes, you may not be able to resolve the
issue with your Manager or General Manager If this is the case, take your
concern to your Area Director, Director of Operations or up to the Market
President to get the answers you need.
3. Talk with
Human Resources. If you have tried the above steps and are not satisfied, or
if you are not comfortable talking to your managers for any reason, you can
contact your Human Resources Generalist to get the help you need.
4. Talk with
Support Center. If for any reason you are uncomfortable with following the prior
steps, you should feel free to contact the Support Center Human Resource Dept.
at 216.525 2775 or Employee Hotline at 800.837.3667 x1300 and ask for help.
Step 2:
EXECUTIVE REVIEW
If you have tried the Open Door Policy and are not
satisfied, you may request the Executive Review Step. In this step, the
Company's President or his designee (the "Executive") will review the
issue or problem and attempt to resolve the issue or problem to your
satisfaction and to the satisfaction of your Manager and the Company. Failing that,
the Executive will make a decision.
Here is how you obtain access to the Executive Review
Step:
1. Request
review. As soon as possible after your exhaustion of the Open Door Policy Step
process, you can start the Executive Review process by contacting the Company's
Employee Relations department. The Employee Relations department can be reached
at 216.525.2775 or you can call the Employee Hotline at 800.837.3667 x1300 and
ask for help.
2. Submit
information. In order to access the Executive Review Step, you should provide
a written statement that contains as much of the following information as is reasonably
available to you:
a. Describe in detail, to the best of your ability,
the factual basis on which your claim is made.
b. Describe the measures you have taken at the
Communication Step to resolve the issue including the supervisors you have
spoken with about the problem.
c. Describe the nature and extent of any remedy or
relief you believe you should have. You can
obtain a copy of a form to use for this purpose from the Human Resources Department.
3. The Review.
The Company's Executive will review the problem and make whatever investigation
he believes is appropriate under the circumstances. This may include, in all likelihood,
a discussion with you and your Manager and a review of all relevant documents.
4. The
Solution. The Executive will attempt to find a way to resolve the problem
to the satisfaction of all the parties involved in the situation. However, if
the problem cannot be resolved in this manner, the Executive will make a
decision. That decision will be made in writing, generally within thirty (30)
days of your request for executive review.
5. Non-Legal
Claims. If your claim is not a statutory or common law claim ("legal claim"),
Executive Review is the final step in the Dispute Resolution Program. (Only
legal claims may proceed to mediation or arbitration). For example, mediation
and arbitration are not available to review performance evaluations, job
elimination or lay-off decisions, Company work rules, policies and pay rates,
or increases or decreases in benefits, except to the extent such matters relate
to statutory or common law claims.
Step 3:
MEDIATION
If you believe you have a legal claim that was not
solved through the Open Door Policy or Executive Review, the next step is
Mediation. In Mediation, an objective, independent third party tries to help
the parties reach a mutually agreeable solution.
When you or the Company requests Mediation, the
Company will contact the American Arbitration Association (AAA) or a similar
organization specializing in dispute resolution. The agency will assign a
professional mediator to mediate the dispute. The mediator will listen, work to
open communication lines, and offer creative solutions. But the mediator does
not make a final decision. It is up to you and the Company to reach agreement. The
goal of mediation is to develop a solution that satisfies both parties
involved.
Here is how to put the Mediation Step to work for
you:
1. Advise the
Employee Relations department that you request Mediation. You should
request Mediation as soon as possible, generally within sixty (60) days from
the date you complete the Executive Review Step, so that the issues will be fresh
in your mind. You will be requested to complete a Request for Mediation form,
which will be furnished.
2. Select
mediator. When either you or the Company request Mediation, the parties
will select an outside, independent neutral mediator to handle the mediation
process. The Company will pay the fees of the mediator and the mediation
agency.
You, the
mediator and the Company representative meet. The mediator will schedule a
meeting between you and the Company representative. The mediator will guide the
discussion and help resolve the problem. However, it is up to both you and the
Company to reach agreement. The mediator does not make the final decision.
4. Written
agreement. If appropriate, after you and the Company have agreed upon a solution,
a written agreement will be signed by the parties.
Step 4:
ARBITRATION
If you have a work-related problem that involves one
of your legally protected rights, which has not been resolved through the
earlier steps, you may request Arbitration.
In Arbitration, an outside neutral expert chosen and agreed upon by you
and the Company, called an "arbitrator",becomes involved in the
resolution process. He or she listens to the facts, then makes a final binding
decision and awards any damages, just like a judge in a court of law.
Arbitration is less formal than conventional court litigation but is clearly
established and governed by rules and standards of conduct, which are designed
to assure due process of law is fully protected. The goal of Arbitration is to
provide effective and efficient problem resolution.
Here is how the Arbitration process works:
1. Request
Arbitration. If you believe you have a legal claim, you may request that
your claim go to Arbitration. Simply complete an Arbitration Request Form
(provided upon request) and return it to the Company at its Cleveland, Ohio
Support Center addressed to the attention of the Apple American Group Employee
Relation Department, 6200 Oak Tree Blvd, Suite 250, Independence, Ohio 44131.
The form can be obtained from your Human Resources Generalist. The Arbitration
will be conducted by the AAA or any similar organization mutually acceptable to
you and the Company. The arbitration will be conducted under the AAA's
"National Rules for the Resolution of Employment Disputes", which are
in effect at the time the demand for arbitration is filed. The rules can be obtained
from the AAA's website at ADR.org or from the Company upon request.
The arbitration agency selected (the
"agency") will then bill you and the Company each a filing fee. Your
portion of that fee is limited to $125.00. The Company will pay the balance of
the agency's initial filing fee and will pay the arbitrator's fee. If you
establish that you cannot pay the filing fee, the Company will pay your portion
of the fee.
2. A hearing
is set. The arbitrator will schedule a date, time and place for a hearing. During
this hearing, both you and the Company present the pertinent facts, documents, and
witnesses. You may hire a lawyer to participate in the Arbitration hearing with
you. The hearing will be conducted in the community where you are/were employed
by the Company or in another mutually agreeable location.
3. A decision
is made. Based on the information presented and the facts gathered, the arbitrator
will make a final binding decision in writing that will set forth the essential
findings and conclusions on which the award is based. The decision of
arbitrator shall have a final and binding effect in any related litigation. If
you win, the arbitrator can award you anything you might seek through a court
of law. By using Arbitration, your rights are protected and damages can be paid
if those rights have been violated.
PROGRAM RULES
CLAIMS SUBJECT TO ARBITRATION
Claims and disputes subject to arbitration include
all those legal claims you may now or in the future have against the Company or
against its officers, directors, shareholders, employees or agents, including
claims related to any Company employee benefit program or against its
fiduciaries or administrators (in their personal or official capacity), and all
claims that the Company may now or in the future have against you, whether or not
arising out of your employment or termination, except as expressly excluded
under the "Claims Not Subject to Arbitration" section.
Legal claims that are subject to arbitration include,
but are not limited to:
*claims for wages or other compensation;
* claims for breach of any contract, covenant or
warranty (expressed or implied);
* tort claims (including, but not limited to, claims
for physical, mental or psychological injury, but excluding statutory workers
compensation claims);
* claims for wrongful termination;
* claims for sexual or other illegal harassment or
discrimination (including, but not limited to, claims based on race, sex,
sexual orientation, religion, national origin, age, medical condition or
disability whether under federal, state or local law);
* claims for benefits or claims for damages or other
remedies under any employee benefit program sponsored by the Company (after
exhausting administrative remedies under the terms of such plans);
* "whistleblower" claims under any federal,
state or other governmental law, statute, regulation or ordinance;
* claims for a violation of any other non-criminal
federal, state or other governmental law, statute, regulation or ordinance; and
* claims for retaliation under any law, statute,
regulation or ordinance.
CLAIMS NOT
SUBJECT TO ARBITRATION
The only claims or disputes not subject to arbitration are
as follows:
* any claim by an employee for benefits under a plan
or program which provides its own binding arbitration procedure;
* any statutory workers compensation claim; and
* unemployment insurance claims;
Your agreement to adhere to this Dispute Resolution
Program does not prohibit you from pursuing an administrative claim with the
National Labor Relations Board, any state or federal department of labor or the
United States Equal Employment Opportunity Commission. This Agreement, does,
however, preclude you from personally pursuing court action regarding any such
claim.
Additionally, nothing in this Agreement is intended
to prevent either you or the Company from obtaining injunctive relief in court
to prevent irreparable harm pending the conclusion of any arbitration conducted
hereunder and either of us may apply to the appropriate state or federal court
for a temporary restraining order, preliminary injunction, or other interim or
conservatory relief, as necessary, without breach of this arbitration agreement
and without abridgement of the powers of the arbitrator.
The parties also agree that any arbitration between
the employee and the Company is of their individual claim and that any claim
subject to arbitration will not be arbitrated on a collective or class-wide basis.
However, this provision does not preclude employees from exercising their
rights under the National Labor Relations Act to joining other employees in a
collective action to improve working conditions.
Also, any non-legal dispute is not subject to arbitration.
Examples include disputes over a performance evaluation, issues with
co-workers, or complaints about your work site or work assignment which do not
allege a legal violation. Neither the employee nor the Company has to submit
the items listed under this "Claims Not Subject to Arbitration" caption
to arbitration under this Program and may seek and obtain relief from a court
or the appropriate administrative agency.
REQUIRED
NOTICE OF ALL CLAIMS
When seeking arbitration, the claimant must file the
Request for Arbitration form and give written notice of any claim to the other
party within one year of the act complained of or within the applicable statute
of limitations period, whichever is longer. Subject to any exceptions under
applicable law, the day the act complained of occurred shall be counted for
purposes of determining the applicable period.
Use the Request for Arbitration form when submitting
a claim for arbitration. Identify and describe the nature of all claims
asserted and the facts on which your claims are based. Send this written notice
by certified or registered mail, return receipt requested. If the Company
wishes to invoke Arbitration, it will also complete a Request for Arbitration form
identifying and describing the nature of all claims asserted and the facts on
which the claims are based and send this written notice to you at the last
address recorded in the Company's payroll records.
ARBITRATION
PROCEDURES
You must use the Mediation Step explained in this
policy before requesting Arbitration. The agency will administer any
Arbitration under the MA's "National Rules for the Resolution of
Employment Disputes" and in conformity with this Dispute Resolution Program.
Go to ADR.org to obtain a copy of the rules or request a copy from the Company.
The rules in effect on the date a demand is made shall control.
The arbitration will be before a neutral arbitrator
who is licensed to practice law and who has significant experience in the
employment law area. The arbitration shall apply the substantive law and the
laws of remedies, if applicable, of the state in which the claim arose, or
federal law or both, depending upon the claims asserted. The decision of the arbitrator
shall be in writing and shall provide the reasons for the award unless the parties
agree otherwise.
The arbitrator shall have jurisdiction to hear and
rule on pre-hearing disputes and is authorized to hold a pre-hearing conference
by telephone or in person, as the arbitrator deems necessary. The arbitrator
shall have the authority to rule on a motion to dismiss and/or a motion for
summary judgment by any party and, in doing so, must apply the standards
governing such motion under the Federal Rules of Civil Procedure.
PRE-HEARING
PROCEDURES
You and the Company each have the right to take the
deposition of individuals and expert witnesses designated by another party.
Depositions and other pre-trial discovery will be taken in accordance with the
order of the arbitrator selected under the Program, who shall allow adequate
discovery. You and the Company have the right to subpoena witnesses to the
Arbitration in accordance with the Federal Rules of Civil Procedure. At least
thirty (30) days before the Arbitration, you and the Company must exchange
lists of witnesses, including any experts, and copies of all exhibits to be
used at the Arbitration.
ARBITRATION
FEES AND COSTS
There are two types of administrative fees and costs
associated with Arbitration; a filing fee with the arbitration agency selected
and payment to the arbitrator for his or her services and expenses. Such fees
and other expenses shall be allocated as follows:
1. The party requesting Arbitration must pay a
$125.00 filing fee to the agency to request Arbitration. If you request
Arbitration the Company will pay the balance of the initial filing fee, and
will pay the entire fee if it requests Arbitration.
2. Either party, at its expense, may arrange for and
pay the cost of a court reporter to provide a stenographic record of the
Arbitration proceedings.
3. Each party shall be responsible for its own
attorneys' fees and related litigation expenses, if any; however, if any party
prevails on a statutory claim, which allows the prevailing party to be awarded
attorneys' fees the arbitrator may award reasonable fees to the prevailing
party.
4. Where permitted by law, the arbitrator may assess
attorneys' fees against a party upon showing by the other party that the first
party's claim is frivolous or unreasonable or factually groundless.
5. If either party pursues a legal claim covered by
the Dispute Resolution Program in court or by any means other than Arbitration,
the responding party shall be entitled to stay or dismissal of such action, the
remand of such action to Arbitration, and the recovery of all costs and attorneys
fees and expenses related to such action.
MULTI-STATE
BUSINESS
The Company is engaged in transactions involving
interstate commerce and your employment involves such commerce; therefore, the
parties agree that the Federal Arbitration Act shall govern the interpretation,
enforcement and proceedings under the Dispute Resolution Program.
PROGRAM
PROVISIONS/ENFORCEMENT
The provisions of the Program document are severable
and, should any provision be held unenforceable, all others will remain valid
and binding. No provision of the Program document will be held unenforceable if
such provision can be reasonably interpreted in a manner that results in such
provision being enforceable. The arbitrators, and not any federal, state, or
local court or agency, shall have exclusive authority to resolve any dispute
relating to the interpretation, arbitrability, applicability, enforceability or
formation of the agreement to arbitrate including, but not limited to, any
claim that all or any part of the agreement to arbitrate is void and voidable.
If a court should determine that Arbitration under
this Program is not the exclusive, final, and binding method for the Company
and its employees to resolve disputes and/or that the decision and award of the
arbitrator is not final and binding as to some or all of a party's claim(s),
the party must submit the claim(s) to Arbitration and pursue the Arbitration to
conclusion before filing or pursuing any legal, equitable, or other legal proceeding
for any eligible claim in a court of competent jurisdiction.
PROGRAM STEPS
While we encourage you to use all of the steps in the
Program in the order outlined, we realize that in some cases it may not be
appropriate to use the preliminary steps. Accordingly, if your claim involves a
legal claim that is subject to Arbitration hereunder, you may proceed directly
to Step 3, Mediation, without first using Step 1, Open Door Policy or Step 2,
Executive Review. The Company may skip Steps 1 and 2 if a legal claim is
involved.
NOT AN
EMPLOYMENT CONTRACT/EXCLUSIVE REMEDY
While this Program constitutes a binding promise
between you and the Company to resolve all disputes pursuant to the process
outlined herein, this Program is not and shall not be construed to create any
contract of employment, expressed or implied. Nor does this Program in any way
alter the "at will" status of any employment. This Program will prevent
you from filing a lawsuit in Court for individual, class, or collective relief
for a legal claim subject to arbitration.
DISCLAIMER:
The views and opinions expressed within this media are
personal and based upon the facts and information as it has been presented to
me. I am not an attorney and do not represent myself as one. I always recommend that employers and
employees seek appropriate legal counsel with matters such as these to further
limit the potential liability to both you and your organization.
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