NLRB JUDGE RULES COMPANY MAINTAINED UNLAWFUL ARBITRATION POLICY

FROM: NATIONAL LABOR RELATIONS BOARD

An NLRB Administrative Law Judge has issued a decision finding that 24 Hour Fitness USA, Inc. maintained and enforced an unlawful arbitration policy that required employees to give up their federally protected rights to take concerted action.

The California-based corporation, which operates fitness centers across the country, required new employees to agree in writing to submit all employment-related claims to individual arbitration. Employees were also prohibited from discussing such claims with their co-workers.

The employee handbook advised employees they could opt out of the policy by taking a series of steps. However, Judge William L. Schmidt found that the provision was "an illusion" because the process was "convoluted" and because employees would be unable to identify others who had also opted out with whom they could discuss their case.

Judge Schmidt relied on the Board’s recent decision in DR Horton, which detailed Appellate and Supreme Court decisions dating back to the 1940s reaffirming the principle that "employers cannot enter into individual agreements with employees in which the employees cede their statutory rights to act collectively."

He rejected the arguments of 24 Hour Fitness and the Chamber of Commerce, which filed an amicus brief in the case, saying they wished "to establish an employer’s right to restrict employees, in order to hold a job, from exercising their statutory right to use the full-range of legal remedies generally available to all citizens."

The fitness center operator successfully pursued enforcement of the individual arbitration clause in at least eight lawsuits filed by employees at several California facilities alleging discrimination and wage and hour violations.

In his decision, Judge Schmidt ordered the company to remove the prohibition against class or collective actions from the employee handbook, and to notify all employees of the change. He also ordered 24 Hour Fitness to notify all arbitral or judicial tribunals where it has pursued enforcement of the clause that it desires to withdraw the request.

BAKED-GOODS CO. TO PAY BACK WAGES FOR DISCHARGING WORKERS FOR TRYING TO ORGANIZE A UNION

FROM:  NATIONAL LABOR RELATIONS BOARD
Baked-goods manufacturer Sterling Foods, LLC, has agreed to pay more than $58,000 in back pay and interest to six employees who were discharged in the fall of 2011 following a union organizing campaign. Three of the employees have also accepted offers of reinstatement to their previous jobs.

The United Food and Commercial Workers Local Union No. 455 filed charges alleging the employer engaged in multiple unfair labor practices during and after the union’s attempt to organize about 500 employees at the San Antonio, Texas facility. An election petition was not filed.

Following an investigation by regional staff, NLRB Regional Director Martha Kinard issued a complaint alleging that, in response to the union’s campaign, Sterling Foods unlawfully discharged six employees, threatened to terminate other employees, solicited an employee to report on union activities, offered an employee a financial benefit if he reported the union activities of employees, engaged in surveillance of employee union activities, called the police on employees and union organizers engaged in union activity, prohibited employees from accepting union literature and directed employees to throw away union literature. A hearing on the complaint had been scheduled to start on August 6, 2012 in San Antonio.

The Regional Director had also filed a petition with the U. S. District Court for the Western District of Texas, San Antonio Division, seeking a temporary injunction against Sterling Foods’ unfair labor practices and an interim order of reinstatement of the six discharged employees. A hearing on that petition had been scheduled for July 19, 2012.

The settlement, signed on July 13, 2012, eliminates the need for both hearings. Sterling Foods also agreed not to engage in such unfair labor practices in the future, to post a notice to that effect at its San Antonio facility, and to mail a copy of the notice to all employees.

JUDGE ORDERS CONNECTICUT HOTEL TO REHIRE 28 WORKERS FIRED FOR UNION ACTIVITY

The following excerpt is from a National Labor Relations Board e-mail:

A U.S. District Court Judge in Connecticut has ordered the Stamford Plaza Hotel and Conference Center to reinstate 28 employees who were laid off, then rehired by a subcontractor to perform the same work, after they expressed support for a union.

The layoffs occurred just weeks after the United Food & Commercial Workers Union, Local 371, began gathering signatures for a unionization effort in June 2011. The two hotel operations that were subcontracted, housekeeping and maintenance, had demonstrated the strongest level of union support.

The NLRB regional office in Hartford issued a complaint against the hotel, alleging that the subcontracting was an unlawful attempt to disrupt the organizing campaign. The region sought an injunction from the federal court to restore the work situation to what it had been while the case works its way through the NLRB’s process.

In granting the injunction on March 22, Judge Mark R. Kravitz found that the region was likely to prevail and that prompt action was needed to prevent irreparable harm. “Given the timing of the Stamford Plaza’s decision to subcontract, its shifting explanations for that decision, and the testimony that the hotel continues to structure its subcontracting arrangements with the goal of frustrating union activity, the Court easily finds reasonable cause to believe that unfair labor practices have occurred,” the judge wrote. The judge further found that it was “just and proper” to grant the injunction even though the employees had been re-hired by the subcontractors, because “the termination of so many pro-union housekeeping and maintenance employees seems to have frozen, not just chilled, organization efforts at Stamford Plaza.”

In addition to ordering the reinstatement of the employees to the hotel’s payroll until a final decision has been reached in the NLRB case, the judge also ordered the employer to refrain from interrogating employees about their union sympathies or otherwise interfering with their labor rights.