Fatemeh Johnmohammadi v. Bloomingdale's, Inc.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

FATEMEH JOHNMOHAMMADI, No. 12-55578

individually and on behalf of other

persons similarly situated, D.C. No.

Plaintiff-Appellant, 2:11-cv-06434-

GW-AJW

v.

BLOOMINGDALE’S, INC., OPINION

Defendant-Appellee.

Appeal from the United States District Court

for the Central District of California

George H. Wu, District Judge, Presiding

Argued and Submitted

December 6, 2013—Pasadena, California

Filed June 23, 2014

Before: John T. Noonan and Paul J. Watford, Circuit

Judges, and William E. Smith, Chief District Judge.*

Opinion by Judge Watford

*

The Honorable William E. Smith, Chief District Judge for the U.S.

District Court for the District of Rhode Island, sitting by designation.

2 JOHNMOHAMMADI V. BLOOMINGDALE’S

SUMMARY**

Arbitration / Class Action

The panel affirmed the district court’s order granting the

motion of Bloomingdale’s, Inc. to compel arbitration under

the Federal Arbitration Act, and dismissing without prejudice

the putative class action brought by a former employee to

recover unpaid overtime wages.

The arbitration agreement, contained in Bloomingdale’s

employment documents, provided that employees who fail to

opt out waive their right to pursue employment-related claims

on a collective basis in any forum, judicial or arbitral.

The panel held that the district court correctly held that

the arbitration agreement was valid, and under the Federal

Arbitration Act it must be enforced according to its terms.

The panel held that the employee had the right to opt out of

the arbitration agreement, and had she done so she would be

free to pursue this class action in court. The panel further

held that having freely elected to arbitrate employment-

related disputes on an individual basis, without interference

from Bloomingdale’s, the employee could not claim that

enforcement of the arbitration agreement violated either the

Norris-LaGuardia Act or the National Labor Relations Act.

**

This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

JOHNMOHAMMADI V. BLOOMINGDALE’S 3

COUNSEL

Dennis F. Moss (argued), Sherman Oaks, California; Ira

Spiro, Spiro Moore, LLP, Los Angeles, California; Sahag

Majarian II, Law Offices of Sahag Majarian II, Tarzana,

California, for Plaintiff-Appellant.

David E. Martin (argued) and Catherine E. Sison, Macy’s

Inc., St. Louis, Missouri; John S. Curtis, Law Offices of Julia

Azrael, North Hollywood, California, for Defendant-

Appellee.

Andrew J. Pincus (argued), Evan M. Tager, Archis A.

Parasharami, and Richard B. Katskee, Mayer Brown LLP,

Washington, D.C.; Robin S. Conrad and Shane B. Kawka,

National Chamber Litigation Center, Inc., Washington, D.C.,

for Amicus Curiae Chamber of Commerce of the United

States of America.

Cliff Palefsky and Scott Stillman, McGuinn, Hillsman &

Palefsky, San Francisco, California, for Amicus Curiae

California Employment Lawyers Association.

Jeffrey A. Berman and James M. Harris, Seyfarth Shaw LLP,

Los Angeles, California, for Amicus Curiae California

Employment Law Council.

4 JOHNMOHAMMADI V. BLOOMINGDALE’S

OPINION

WATFORD, Circuit Judge:

This is a class action brought by plaintiff Fatemeh

Johnmohammadi to recover unpaid overtime wages from

defendant Bloomingdale’s, Inc., her former employer. All of

Johnmohammadi’s claims arise under state law and are

asserted on behalf of similarly situated current and former

California employees. Johnmohammadi initially filed the

action in state court, but Bloomingdale’s removed the action

to federal court under the Class Action Fairness Act of 2005.

See 28 U.S.C. §§ 1332(d)(2), 1453(b).

Once in federal court, Bloomingdale’s moved to compel

arbitration under the Federal Arbitration Act (FAA), 9 U.S.C.

§ 1 et seq., and asked the district court to stay the action

pending completion of arbitration. The court granted the

motion to compel. It determined that shortly after being hired

by Bloomingdale’s, Johnmohammadi entered into a valid,

written arbitration agreement and that all of her claims fall

within the scope of that agreement.

In these circumstances § 3 of the FAA, 9 U.S.C. § 3,

seems to direct that the action “shall” be stayed pending

completion of arbitration, as two other circuits have held.

Lloyd v. Hovensa, LLC, 369 F.3d 263, 268–69 (3d Cir. 2004);

Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953, 955

(10th Cir. 1994). We have held that, notwithstanding the

language of § 3, a district court may either stay the action or

dismiss it outright when, as here, the court determines that all

of the claims raised in the action are subject to arbitration.

Sparling v. Hoffman Constr. Co., 864 F.2d 635, 638 (9th Cir.

1988). The choice matters for purposes of appellate

JOHNMOHAMMADI V. BLOOMINGDALE’S 5

jurisdiction: An order compelling arbitration and staying the

action isn’t immediately appealable, 9 U.S.C. § 16(b)(1)–(2);

Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 87 n.2

(2000), but an order compelling arbitration and dismissing the

action is. § 16(a)(3); Green Tree, 531 U.S. at 89. The district

court chose to dismiss Johnmohammadi’s action without

prejudice, so we have jurisdiction to hear this appeal. See

Interactive Flight Techs., Inc. v. Swissair Swiss Air Transp.

Co., 249 F.3d 1177, 1179 (9th Cir. 2001).

The relevant facts aren’t in dispute. When

Bloomingdale’s hired Johnmohammadi as a sales associate,

she received a set of documents describing the company’s

dispute resolution program. Those documents informed her

that she agreed to resolve all employment-related disputes

through arbitration unless she returned an enclosed form

within 30 days electing, as the form put it, “NOT to be

covered by the benefits of Arbitration.” Johnmohammadi did

not return the opt-out form. She does not contest the district

court’s findings that she made a fully informed and voluntary

decision, and that no threats of termination or retaliation were

made to influence her decision. By not opting out within the

30-day period, she became bound by the terms of the

arbitration agreement. See Circuit City Stores, Inc. v. Ahmed,

283 F.3d 1198, 1199–1200 (9th Cir. 2002).

The arbitration agreement is quite detailed, but the

provision that matters here is the one that forbids arbitration

on a class-wide basis: “The Arbitrator shall not consolidate

claims of different Associates into one (1) proceeding, nor

shall the Arbitrator have the power to hear an arbitration as a

class action . . . .” Employees who fail to opt out waive their

right to pursue employment-related claims on a collective

basis in any forum, judicial or arbitral. The only question

6 JOHNMOHAMMADI V. BLOOMINGDALE’S

before us is whether this provision is enforceable; if it is,

Johnmohammadi may not proceed with this action.

Johnmohammadi can’t argue that the class-action waiver

is unenforceable under California law. See AT&T Mobility

LLC v. Concepcion, 131 S. Ct. 1740, 1750–51 (2011). She

argues instead that federal law renders the waiver

unenforceable, relying on provisions in two federal labor

statutes. The first statute, the Norris-LaGuardia Act,

29 U.S.C. § 101 et seq., states that, as a matter of public

policy, employees “shall be free from the interference,

restraint, or coercion of employers of labor, or their agents, in

the designation of . . . representatives [of their own choosing]

or in self-organization or in other concerted activities for the

purpose of collective bargaining or other mutual aid or

protection.” § 102 (emphasis added).1 The Act declares that

1

Section 102 currently provides:

In the interpretation of this chapter and in determining

the jurisdiction and authority of the courts of the United

States, as such jurisdiction and authority are defined

and limited in this chapter, the public policy of the

United States is declared as follows:

Whereas under prevailing economic conditions,

developed with the aid of governmental authority for

owners of property to organize in the corporate and

other forms of ownership association, the individual

unorganized worker is commonly helpless to exercise

actual liberty of contract and to protect his freedom of

labor, and thereby to obtain acceptable terms and

conditions of employment, wherefore, though he should

be free to decline to associate with his fellows, it is

necessary that he have full freedom of association,

self-organization, and designation of representatives of

his own choosing, to negotiate the terms and conditions

JOHNMOHAMMADI V. BLOOMINGDALE’S 7

any “undertaking or promise in conflict with the public policy

declared in section 102 . . . shall not be enforceable in any

court of the United States.” § 103.

The second statute, the National Labor Relations Act

(NLRA), 29 U.S.C. § 151 et seq., says essentially the same

thing. Section 7 of the NLRA grants covered employees, see

§ 152(3), certain substantive rights, among them the right “to

engage in other concerted activities for the purpose of

collective bargaining or other mutual aid or protection.”

§ 157 (emphasis added).2 Section 8(a)(1), in turn, makes it

of his employment, and that he shall be free from the

interference, restraint, or coercion of employers of

labor, or their agents, in the designation of such

representatives or in self-organization or in other

concerted activities for the purpose of collective

bargaining or other mutual aid or protection; therefore,

the following definitions of and limitations upon the

jurisdiction and authority of the courts of the United

States are enacted.

29 U.S.C. § 102.

2

Section 7 currently provides:

Employees shall have the right to self-organization, to

form, join, or assist labor organizations, to bargain

collectively through representatives of their own

choosing, and to engage in other concerted activities for

the purpose of collective bargaining or other mutual aid

or protection, and shall also have the right to refrain

from any or all of such activities except to the extent

that such right may be affected by an agreement

requiring membership in a labor organization as a

8 JOHNMOHAMMADI V. BLOOMINGDALE’S

illegal for an employer “to interfere with, restrain, or coerce

employees in the exercise of rights guaranteed in section

157.” § 158(a)(1).

Johnmohammadi contends that filing this class action on

behalf of her fellow employees is one of the “other concerted

activities” protected by the Norris-LaGuardia Act and the

NLRA. There is some judicial support for her position. See,

e.g., Eastex, Inc. v. NLRB, 437 U.S. 556, 565–66 (1978);

Brady v. Nat’l Football League, 644 F.3d 661, 673 (8th Cir.

2011); Mohave Elec. Coop, Inc. v. NLRB, 206 F.3d 1183,

1189 (D.C. Cir. 2000); Salt River Valley Water Users’ Ass’n

v. NLRB, 206 F.2d 325, 328 (9th Cir. 1953). But we need not

decide whether Johnmohammadi has correctly interpreted this

statutory phrase. To prevail, she must still show that

Bloomingdale’s interfered with, restrained, or coerced her in

the exercise of her right to file a class action. In our view,

Bloomingdale’s did none of these things.

We can quickly dismiss any notion that Bloomingdale’s

coerced Johnmohammadi into waiving her right to file a class

action. Bloomingdale’s did not require her to accept a class-

action waiver as a condition of employment, as was true in In

re D.R. Horton, Inc., 357 N.L.R.B. No. 184, 2012 WL 36274

(Jan. 3, 2012), enforcement denied in part, 737 F.3d 344 (5th

Cir. 2013). Bloomingdale’s gave her the option of

participating in its dispute resolution program, which would

require her to arbitrate any employment-related disputes on

an individual basis. As the district court found,

condition of employment as authorized in section

158(a)(3) of this title.

29 U.S.C. § 157.

JOHNMOHAMMADI V. BLOOMINGDALE’S 9

Johnmohammadi was fully informed about the consequences

of making that election, and she did so free of any express or

implied threats of termination or retaliation if she decided to

opt out of arbitration. She has not challenged those findings.

There is thus no basis for concluding that Bloomingdale’s

coerced Johnmohammadi into waiving her right to file a class

action.

Nor is there any basis for concluding that Bloomingdale’s

interfered with or restrained Johnmohammadi in the exercise

of her right to file a class action. If she wanted to retain that

right, nothing stopped her from opting out of the arbitration

agreement. Bloomingdale’s merely offered her a choice:

resolve future employment-related disputes in court, in which

case she would be free to pursue her claims on a collective

basis; or resolve such disputes through arbitration, in which

case she would be limited to pursuing her claims on an

individual basis. In the absence of any coercion influencing

the decision, we fail to see how asking employees to choose

between those two options can be viewed as interfering with

or restraining their right to do anything.

Johnmohammadi attempts to analogize the choice

Bloomingdale’s offered her to other types of employer

misconduct that violate § 8(a)(1) of the NLRA. Specifically,

she invokes cases in which the employer offered its

employees a benefit, such as a raise, in exchange for the

employee’s agreement to refrain from protected activity. See,

e.g., Nat’l Licorice Co. v. NLRB, 309 U.S. 350, 360 (1940);

NLRB v. Stone, 125 F.2d 752, 754, 756 (7th Cir. 1942); In re

Ishikawa Gasket Am., Inc., 337 N.L.R.B. 175, 175–76 (2001).

She contends Bloomingdale’s did the same thing by offering

employees the “benefit” of resolving all employment-related

10 JOHNMOHAMMADI V. BLOOMINGDALE’S

disputes through arbitration in exchange for the employee’s

agreement not to file or join a class action.

To prevail on this argument, Johnmohammadi would need

to show that offering the arbitration agreement constitutes

“conduct immediately favorable to employees,” which

Bloomingdale’s undertook with the express purpose of

impinging upon its employees’ “freedom of choice” in

deciding whether to waive or retain their right to participate

in class litigation. NLRB v. Exch. Parts Co., 375 U.S. 405,

409 (1964); see also NLRB v. Anchorage Times Pub’g Co.,

637 F.2d 1359, 1367 (9th Cir. 1981). We don’t doubt that

offering the arbitration agreement could be viewed as conduct

favorable to employees, since the benefits of having an

arbitral forum available to resolve workplace disputes can be

substantial. For certain types of disputes the speed,

informality, and lower costs of arbitration provide real

advantages over litigating in court. See Concepcion, 131 S.

Ct. at 1749, 1751. But arbitration comes with disadvantages

of its own, which, depending on the nature of the dispute,

may make it a less attractive forum for employees. At the

outset of the employment relationship, before an employee

knows what types of workplace-related disputes she may later

encounter, the benefits (and costs) of prospectively agreeing

to arbitrate all such disputes are decidedly uncertain, even

putting aside the class-action waiver. We don’t think the

offer of those benefits is of such a character that it would tend

to interfere with an employee’s freedom of choice about

whether to forgo future participation in class actions. And

Johnmohammadi has offered no evidence that

Bloomingdale’s offered those benefits with the express

purpose of curtailing its employees’ freedom of choice.

Indeed, it would be difficult for Johnmohammadi to make

such a showing here, given that the presumed benefits of

JOHNMOHAMMADI V. BLOOMINGDALE’S 11

agreeing to arbitrate all employment-related disputes would

largely be lost if the agreement permitted class-wide

arbitration. See id.

Johnmohammadi also argues that, whether procured by

way of inducement or not, an employee may never waive the

right to participate in class litigation by negotiating an

individual contract with her employer. She relies principally

on J. I. Case Co. v. NLRB, 321 U.S. 332 (1944), but that case

does not support the broad proposition she urges us to adopt.

The Court held in J. I. Case that an employer may not

negotiate individual contracts with employees and then refuse

to engage in collective bargaining with the employees’

designated union representatives on the ground that doing so

would violate the terms of the individual contracts. Id. at

337. The Court reasoned that any collective bargaining

agreement reached between the union and the employer

would necessarily supersede an employee’s individual

contract, to the extent that the terms of the collective

bargaining agreement were more favorable to the employee.

Id. at 338–39. But the Court also stressed that nothing

prevents an employee from making an individual contract

with her employer, “provided it is not inconsistent with a

collective agreement or does not amount to or result from or

is not part of an unfair labor practice.” Id. at 339. Here,

Johnmohammadi was not covered by a collective bargaining

agreement, and for the reasons discussed above, we do not

believe her decision to enter into the arbitration agreement

amounted to or resulted from an unfair labor practice.

In sum, Johnmohammadi had the right to opt out of the

arbitration agreement, and had she done so she would be free

to pursue this class action in court. Having freely elected to

arbitrate employment-related disputes on an individual basis,

12 JOHNMOHAMMADI V. BLOOMINGDALE’S

without interference from Bloomingdale’s, she cannot claim

that enforcement of the agreement violates either the Norris-

LaGuardia Act or the NLRA. The district court correctly

held that the arbitration agreement is valid. Under the FAA

it must be enforced according to its terms. See Am. Express

Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2309 (2013).

AFFIRMED.