On January 17, 2014, Administrative Law Judge Lisa D. Thompson issued her decision in the case of Keith Cunningham, (Charging Party), and Leslie’s Poolmart, Inc., (Respondent). In his Complaint, Mr. Cunningham alleges that the Respondent violated Section 8(a)(1) of the National Labor Relations Act (NLRA) by requiring that all employees enter into an arbitration agreement. The NLRA grants all American workers a broad right to act collectively vis-à-vis their employers. By entering into this agreement the Respondent’s employees did not explicitly waive their right to pursue class, collective, or representative actions; that is, the arbitration agreement “does not expressly prohibit employees from engaging in protected concerted activities.” Still, the Court found that the company intentionally used the agreement to force employees to arbitrate all claims against the employer individually, and that this requirement amounts to denying employees their right under the NLRA to pursue actions collectively.
In short, then, the Court found that the company’s arbitration agreement was unlawful, although not expressly prohibiting employees from engaging in protected collective activity, because it nevertheless has the intended effect of making employees unable to engage in such activity. What was the basis of the Court’s determination that the Respondent’s policy of requiring employees to sign the agreement was unlawful? The answer to this question lies not in the agreement itself, but how the company had sought to use it.
In February of 2013, Cunningham, on behalf of himself and others similarly situated, commenced a wage-and-hour legal case in the Supreme Court of Los Angeles County against his employer, Leslie’s Poolmart, Inc. In their complaint the plaintiffs alleged that their employer had incorrectly and unlawfully calculated and paid overtime to them since 2009. The company’s response to the filing of this lawsuit was to file a Motion to Compel Arbitration, which would have required Mr. Cunningham to arbitrate his claims against the company individually, along with a corresponding Motion to Dismiss his class/collective action.