By Nate Raymond 

The National Labor Relations Board threw a wild card at employment lawyers in January when it held companies couldn't require workers to sign away their rights to bring collective actions. The NLRB's administrative decision against homebuilder D.R. Horton was regarded as a response to the U.S. Supreme Court's blockbuster 2011 decision in AT&T Mobility v. Concepcion, which held that a consumer arbitration agreement could bar class actions. With employment lawyers poised to cite Concepcion to justify similar bars in employment agreements, the NLRB's D.R. Horton ruling appeared to give federal and state judges cover for resisting the Supreme Court's ruling.

More than seven months later, though, the D.R. Horton decision has been overwhelmingly disregarded by the courts. While the 5th Circuit Court of Appeals has yet to rule on Horton's appeal of the NLRB's administrative decision, judges across the country -- and the political spectrum -- have rejected arguments that the NLRB ruling justifies the invalidation of class action waivers in employment arbitration agreements.

The most recent example came Friday, when U.S. District Judge Gene Pratter in Philadelphia sided with a subsidiary of Tenet Healthcare in confirming an arbitrator's finding that a nurse could not bring classwide wage-and-hour claims in arbitration. The nurse's lawyer, Justin Cordello of Thomas & Solomon, had cited D.R. Horton in arguing that the arbitrator had erred. But Pratter said he wasn't swayed by that argument. "Although the NLRB's construction of the [National Labor Relations Act] is entitled to deference, the NLRB has no special competence or experience interpreting the [Federal Arbitration Act]," the judge wrote. (Neither Cordello nor Tenet counsel James Boudreau of Greenberg Traurig responded to requests for comment. Greenberg Traurig had co-counsel at Littler Mendelson.)

A few weeks earlier, in a putative class action of guards suing Securitas Services Inc, U.S. District Judge D.P. Marhsall in Little Rock, Arkansas, on Aug. 1 compelled individual arbitration after concluding that the FAA trumped the NLRA. Marshall said that accepting the NLRB's reasoning would mean favoring litigation over arbitration, in contrast to the federal policy of favoring arbitration. It would also result in a "patchwork" legal system in which one employee might agree to arbitrate claims individually, but as soon as a second employee entered the case, individual arbitration ceded to collective action. "This quilt of possibilities introduces uncertainty and complexity," Marshall wrote. The judge did, however, certify his decision for review by the 8th Circuit Court of Appeals. (Neither plaintiffs' counsel Joshua Sanford of the Sanford Law Firm nor Securitas counsel Eva Madison of Littler Mendelson responded to requests for comment.)

Employees at Waffle House Inc also struck out when they cited D.R. Horton in an effort to convince U.S. District Judge Carlos Murguia of Kansas City, Kansas, to not compel individual arbitration. Murguia preferred to rely on Concepcion. "Although Concepcion may not speak directly to the issue before the court," he wrote, "it does illustrate a guiding principle: arbitration agreements are enforceable even when they prohibit the use of a class action." (Plaintiffs counsel Patrick Reavey of Reavey Law was unavailable for comment, and Waffle House counsel Daniel Turner of Ogletree, Deakins, Nash, Smoak & Stewart did not respond to a request for comment.)

Judges in New York, California, Pennsylvania, Florida and Georgia have similarly refused to allow employee class actions to move forward on the basis of the NLRB's holding, in cases against Jenny Craig, Citigroup, P.F. Chang's and UBS, among others. The NLRB's repudiation hasn't just been in the federal courts either. To date, state appeals courts in California in Los Angeles, San Diego and San Francisco have rejected the NLRB's reasoning, most recently on Aug. 13, in a case against pest control company Truly Nolen of America. When the D.R. Horton decision came down, "people were a little worried," said Daniel Chammas of Venable, who secured the Jenny Craig opinion in May. "But so far, it's almost been universal that courts have said that's gone too far."

"Almost" is the key word. D.R. Horton has been cited by at least three judges -- in New York, Missouri and Wisconsin -- in rejecting arbitration agreements that waived collective action. In February, for instance, U.S. District Judge Fernando Gaitan in Jefferson City, Missouri, stated flatly in a case against Bristol Care Inc, that Concepcion was "not controlling" in employment cases. "In the employment context, waivers of class arbitration are not permissible," Gaitan wrote, citing D.R. Horton. (Bristol's lawyers at Lathrop & Gage have since appealed the decision to the 8th Circuit.)

In a ruling a few weeks later, in a case against Waterstone Mortgage Corp, U.S. District Judge Barbara Crabb in Madison, Wisconsin, agreed with the NLRB that Concepcion "is not on point because the class action waiver in that case did not conflict with the substantive right of a federal statute." Crabb invalidated a class action waiver, but compelled arbitration, allowing Waterstone employees to pursue claims collectively outside of court. Waterstone has since moved to reopen the case. Its counsel, Ari Karen of Offit Kurman, did not respond to requests for comment.

Still, that's three decisions for the employees -- and at least 13 for employers. It's also significant, according to Gerald Maatman of Seyfarth Shaw, that the pro-employee decisions came soon after the NLRB's D.R. Horton decision, while more recent rulings favor employers. "I'm unaware of any recent strong significant decisions where a judge hangs his hat on D.R. Horton," Maatman said.

Plaintiffs' lawyer Ryan Keane of The Simon Law Firm, who represents employees in the Bristol case, said the problem may be that his brethren don't really understand how to deploy the D.R. Horton decision, so they can't convince judges of its significance. "It's frustrating," he conceded, "that judges aren't following DR Horton."

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