Amicus Curiae Brief — Epic Sys. Corp. v. Lewis, 138 S. Ct. 42 (2017) (No. 16-285)

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AND egret

No. 16-285

In the

Supreme Court of the Anited States

EPIC SYSTEMS CORPORATION,

Petitioner,

Vv.

JACOB LEWIS,

Respondent.

—+>

On Writ of Certiorari

to the United States Court of Appeals

for the Seventh Circuit

—~>

BRIEF AMICUS CURIAE OF

PACIFIC LEGAL FOUNDATION

IN SUPPORT OF PETITIONER

DEBORAH J. LA FETRA

Counsel of Record

Pacific Legal Foundation

930 G Street

Sacramento, California 95814

Telephone: (916) 419-7111

Facsimile: (916) 419-7747

E-mail: DLaFetra@pacificlegal.org

Counsel for Amicus Curiae Pacific Legal Foundation

QUESTION PRESENTED

Whether an agreement that requires an employer

and an employee to resolve employment-related

disputes through individual arbitration, and waive

class and collective proceedings, is enforceable under

the Federal Arbitration Act, notwithstanding the

provisions of the National Labor Relations Act.

TABLE OF CONTENTS

Page

QUESTION PRESENTED .... 2... cc ccc ccccces i

TABLE OF AUTHORITIES .................. iv

INTEREST OF AMICUS CURIAE ............. 1

INTRODUCTION AND

SUMMARY OF ARGUMENT ............. 2

REE, Sw 0 6p avecanasectiewutenee ee 3

I. ARBITRATION OF WORKPLACE

DISPUTES REFLECTS CONTRACTUAL

FREEDOM PROTECTED BY THE FAA .... 3

A. Aggregate Litigation Is a Matter of

Procedure, Not a Substantive Right ..... 3

B. The FAA Applies to Independent

Employment Contracts, Even in

Cases Involving Statutory Claims ....... 6

Il. INDIVIDUAL ARBITRATION

OF WORKPLACE DISPUTES

IS BOTH COMMON AND FAIR .......... 11

A. Empirical Studies Show

That Individual Arbitration

Bee Ue IE nc 6 bn obsess eacuwe ou 11

E An Employer’s Requirement

of Individual Arbitration of

Workplace Disputes Should Be

Viewed in the Same Manner as

Any Other Potential Trade-Off ........ 14

ili

TABLE OF CONTENTS—Continued

Page

C. In Stark Contrast to Individual

Arbitration, Class Arbitration Creates

More Problems than it Solves ......... 19

Ill. THE NLRB’S POLICY OF

NONACQUIESCENCE UNDERMINES

OUR CONSTITUTIONAL STRUCTURE ... 22

ech eae eae cekdoes scseces 26

TABLE OF AUTHORITIES

Page

Cases

14 Penn Plaza LLC v. Pyett,

os 5k ghee eens ls 4,11

ABM Indus., Inc. v. Castro,

EE, ee ie 1

Alabama v. Blue Bird Body Co., Inc.,

5738 F.2d 308 (6th Cir. 1978)...............- 11

Amchem Prods., Inc. v. Windsor,

re CLL. bee ewe ch ekee me 10

American Express Co. v. Italian Colors Restaurant,

so. . el a eéh ewe ee Cae 4

Aracri v. Dillard’s, Inc.,

No. 1:10-CV-253, 2011 WL 1388613

es GI EEE . coc ccecccccecesces 5

AT&T Mobility LLC v. Concepcion,

Se EEE «cc cob ccccecec 1-2, 7, 19-21

Atchison, Topeka and Santa Fe Ry. Co. v. Pefia,

44 F.3d 437 (7th Cir. 1994) (en banc) ........ 25

Bailey v. Ameriquest Mortg. Co.,

346 F.3d 821 (Oth Cir. 2008) ..............06. i)

Bender v. A. G. Edwards & Sons, Inc.,

971 F.2d 698 (11th Cir. 1992)................ 9

Boys Mkts., Inc. v. Retail Clerks Union, Local 770,

es a dw aee eee 6

Buckeye Check Cashing, Inc. v. Cardegna,

et ae abs wie wares 3

TABLE OF AUTHORITIES—Continued

Page

Caley v. Gulfstream Aerospace Corp.,

428 F.3d 1359 (11th Cir. 2005),

cert. denied, 547 U.S. 1128 (2006) .......... 7-8

Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984) ........... 24

Circuit City Stores, Inc. v. Adams,

RE ES 4-5, 7-9

City of McAllen v. Zellers,

216 S.W.3d 913 (Tex. 2007) ................ 17

Cloutier v. Costco Wholesale Corp.,

390 F.3d 126 (1st Cir. 2004),

cert. denied, 545 U.S. 1131 (2005) ........... 16

Commc’ns Workers of Am. v. Ector Cty. Hosp. Dist.,

467 F.3d 427 (5th Cir. 2006)................ 15

Cooper Tire & Rubber Co. v. NLRB,

967 F.2d 1246 (Gth Cir. 1902)............... 15

D.R. Horton, Inc. v. NLRB,

737 F.3d 344 (5th Cir. 2013).............. 1, 23

Dean Witter Reynolds, Inc. v. Byrd,

ee ccc ncetebaes 4

Deposit Guar. Natl Bank v. Roper,

ee ca ueenceees 4

Dickler v. Shearson Lehman Hutton, Inc.,

596 A.2d 860 (Pa. Super. Ct. 1991) .......... 19

DIRECTV, Inc. v. Imburgia,

PTT TTT Te teabahe 1

TABLE OF AUTHORITIES

Page

Cases

14 Penn Plaza LLC v. Pyett,

ee ac bentvactees 4,11

ABM Indus., Inc. v. Castro,

wwe kenee 1

Alabama v. Blue Bird Body Co., Inc.,

573 F.2d 309 (5th Cir. 1978)................ 11

Amchem Prods., Inc. v. Windsor,

ee ed bk buen eae ¥.0.8< 10

American Express Co. v. Italian Colors Restaurant,

ee ees é wn beds wae 4

Aracri v. Dillard’s, Inc.,

No. 1:10-CV-253, 2011 WL 1388613

Ee 8

AT&T Mobility LLC v. Concepcion,

ee es ED oo cc cw ceccuess 1-2, 7, 19-21

Atchison, Topeka and Santa Fe Ry. Co. v. Peria,

44 F.3d 437 (7th Cir. 1994) (en banc) ........ 25

Bailey v. Ameriquest Mortg. Co.,

346 F.3d 821 (8th Cir. 2003)................. i)

Bender v. A. G. Edwards & Sons, Inc.,

971 F.2d 698 (11th Cir. 1992)................ g

Boys Mkts., Inc. v. Retail Clerks Union, Local 770,

Ne ce sbedacneun 6

Buckeye Check Cashing, Inc. v. Cardegna,

a occu kaeenieeesecnes 3

TABLE OF AUTHORITIES—Continued

Page

Caley v. Gulfstream Aerospace Corp.,

428 F.3d 1359 (11th Cir. 2005),

cert. denied, 547 U.S 1128 (2006) .......... 7-8

Chevron, U.S.A., Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984) ........... 24

Circuit City Stores, Inc. v. Adams,

nk ai oiate-a d% 60's & 4-5, 7-9

City of McAllen v. Zellers,

216 S.W.3d 913 (Tex. 2007) ..............4.. 17

Cloutier v. Costco Wholesale Corp.,

390 F.3d 126 (1st Cir. 2004),

cert. denied, 545 U.S. 1131 (2005) ........... 16

Commc’ns Workers of Am. v. Ector Cty. Hosp. Dist.,

467 F.3d 427 (Gth Cir. 2006) ................ 15

Cooper Tire & Rubber Co. v. NLRB,

957 F.2d 1246 (5th Cir. 1992)............... 15

D.R. Horton, Inc. v. NLRB,

787 F.3d 344 (Gth Cir. 2013) .............. 1, 23

Dean Witter Reynolds, Inc. v. Byrd,

EEE RE a 4

Deposit Guar. Nat Bank v. Roper,

AS Re 4

Dickler v. Shearson Lehman Hutton, Inc.,

596 A.2d 860 (Pa. Super. Ct. 1991) .......... 19

DIRECTV, Inc. v. Imburgia,

PS 6 Seco ss ccawesccesveses 1

TABLE OF AUTHORITIES—Continued

Page

Equal Employment Opportunity Comm'n v. Waffle

House, Inc., 534 U.S. 279 (2002) ............ 14

Gilmer v. Interstate/Johnson Lane Corp.,

I eek vcwesesces tet 4-5, 8-10

Grabowski v. C. H. Robinson Co.,

817 F. Supp. 2d 1159 (S.D. Cal. 2011) ......... 8

H.K. Porter Co., Inc. v. NLRB,

ee 2

Herman v. Express Sixty-Minutes Delivery Serv.,

Inc.,161 F.3d 299 (5th Cir. 1998) ............ 15

Hill v. Moskin Stores, Inc.,

159 A.2d 299 (Del. Super. Ct. 1960) .......... 15

Insurance Agents’ Intl Union,

eS ae 22

Iskanian v. CLS Transp. Los Angeles, LLC,

59 Cal. 4th 348 (2014), cert. denied,

Te eee 1

Izzi v. Mesquite Country Club,

186 Cal. App. 3d 1309 (1986) ............... 19

Johnson v. RGIS Inventory Specialists,

554 F. Supp. 2d 693 (E.D. Tex. 2007) ........ 16

Johnson v. U.S. R.R. Retirement Bd.,

969 F.2d 1082 (D.C. Cir. 1992) .............. 24

Kohen v. Pac. Inv. Mgmt. Co. LLC & PIMCO

Funds, 571 F.3d 672 (7th Cir. 2009) ......... 21

vil

TABLE OF AUTHORITIES—Continued

Page

Kubik v. Scripps College,

118 Cal. App. 3d 544 (1981) ................ 14

Kutrom Corp. v. City of Center Line,

979 F.2d 1171 (Gth Cir. 1902) ............... 15

Leal-Rodriguez v. INS,

990 F.2d 939 (7th Cir. 1993)................ 23

Lester v. Sec’y of Veterans Affairs,

514 F. Supp. 2d 866 (W.D. La. 2007) ......... 17

Marin Storage & Trucking, Inc. v. Benco

Contracting & Engineering, Inc.,

89 Cal. App. 4th 1042 (2001) ............... 17

Massachusetts Bd. of Retirement v. Murgia,

a. . pac ee bee eeeey 14

Mastro Plastics Corp. v. NLRB,

De ee und ebees eee 6

Miami v. Gioia,

215 So. 2d 780 (Fla. 1968) .............00.. 17

Microsoft v. Baker, 582 U.S. __,

No. 15-457, (June 12, 2017) ................ 10

Mitsubishi Motors Corp. v. Soler Chrysler-

Plymouth, Inc., 473 U.S. 614 (1985). ...... 5, 8-9

Murphy Oil USA, Inc. v. NLRB,

808 F.3d 1013 (5th Cir. 2015) ............... 23

National Union Fire Ins. Co. of Pittsburgh,

Pennsylvania v. Guardtronic, Inc.,

Pe EI EE oo 6 vec vote eews conte 17

Vlil

TABLE OF AUTHORITIES—Continued

Page

Natl Envil. Dev. Ass’n’s Clean Air Project v. EPA,

( bP | J hoe 3). | : GE 25

NLRB v. Houston Chronicle Publ’g. Co.,

300 F.3d 373 (Gth Cir. 196%) ............0028. 17

Noble Drilling Co. v. Drake,

796 F.2d 478 (Gth Cir. 1966)... ... 1... cence. 16

Olin Corp., 268 N.L.R.B. 573 (1984) ............ 5

Oxford Health Plans LLC v. Sutter,

I oo cb od cccccsccccecawe 1

Perrodin v. City of Lafayette,

I ED oo tc cccccccweesese 17

Perry v. Ft. Lauderdale,

352 So. 2d 1194 (Fla. Dist. Ct. App. 1977) ..... 17

Phillips Petroleum Co. v. Shutts,

CP EI. c cc ccotewecccecdecesecs 21

Preston v. Ferrer,

voces see eee ae ewe bes 6

Reich v. Circle C Inus., Inc.,

908 F.2d 324 (6th Cir. 1993)................ 15

Rodriguez de Quijas v. Shearson/American

Express, Inc., 490 U.S. 477 (1989) ........... 10

Rosendo-Ramirez v. INS,

$2 F.8d 1065 (7th Cir. 1904) .............20.:. 23

Ruppert v. Bowen,

5h ew are, le rere 24

TABLE OF AUTHORITIES—Continued

Page

S. S.S. Co. v. NLRB,

i a le ae ae gcarted 26

Shearson/American Express, Inc. v. McMahon,

eg el bk bid es bmn 10

Sheet Metal Workers’ Int Ass'n,

Local 15, AFL-CIO v. NLRB,

491 F.3d 429 (D.C. Cir. 2007)............... 23

Slawienski v. Nephron Pharm. Corp.,

No. 1:10-CV-0460-JEC, 2010 WL 5186622

re occ cecsadeebewecea ea 8

Spielberg Mfg. Co., 112 N.L.R.B. 1080 (1955) ..... 5

Stolt-Nielsen S.A. v. AnimalFeeds Intl Corp.,

I ccc ce stvbevowsecece 19-20

Summit Petroleum Corp. v. EPA,

660 F.3d 733 (Gth Cir. 2012) .............2... 25

Teamsters v. Lucas Flour Co.,

i os is aed web ue 6

Textile Workers Union of Am. v. Lincoln Mills of

Bs Ce CE hve cece ccocensvccscs 6

Turco v. Hoechst Celanese Chem. Group, Inc.,

101 F.3d 1090 (6th Cir. 1996)............... 15

Walker v. Ryan’s Family Steak Houses, Inc.,

400 F.3d 370 (6th Cir. 2005) ................. 8

Walthour v. Chipio Windshield Repair, LLC,

745 F.3d 1336 (11th Cir. 2014)............2-. 4

TABLE OF AUTHORITIES—Continued

Page

Weeks v. Harden Mfg. Corp..,

291 F.3d 1307 (11th Cir. 2002)............... 9

Windham v. Am. Brands, Inc.,

ee 11

Winn v. Tenet Healthcare Corp.,

No. 2:10-CV-02140-JPM, 2011 WL 294407,

Cee ae P,Q I ED co nec ccasnenccesss 8

Federal Statute

I rg ee ree Sa 2,6

RS was a hide Sade deen eae ea 3

NE ed ee a aa Glee dary Mohs eat 4

Rules

eg a aac se we gle 1

De re en eee 1

a eg als Ale aie ore eee 1

Ee ao cn cine es ode aewhas oes 4

Miscellaneous

Amendments to Regional Consistency Regulations,

81 F.R. 51102-01, 51103,

2016 WL 4089445 (Aug. 3, 2016) ............ 25

Androski, Linsday R.,

A Contested Merger: The Intersection of Class

Actions and Mandatory Arbitration Clauses,

ee le Gs PE Es bv ccc ersevevces 20

TABLE OF AUTHORITIES—Continued

Page

Burton, Steven J.,

The New Judicial Hostility to Arbitration:

Federal Preemption, Contract

Unconscionability, and Agreements to

Arbitrate, 2006 J. Disp. Res. 469 ............ 12

Clancy, David S. & Stein, Matthew M. K..,

An Uninvited Guest: Class Arbitration and the

Federal Arbitration Act’s Legislative History,

Se Ss PG SIUIPED cc ccc cece es ecsces 7

Coenen, Dan T.,

The Constitutional Case Against

Intracircuit Nonacquiescence,

75 Minn. L. Rev. 1839 (1991) ............... 22

Drahozal, Christopher R.,

A Behavioral Analysis of Private Judging,

67 Law & Contemp. Probs. 105 (2004) ....... 12

Eisenberg, Theodore & Miller, Geoffrey P..,

The Flight from Arbitration: An Empirical

Study of Ex Ante Arbitration Clauses in the

Contracts of Publicly Held Companies,

56 DePaul L. Rev. 335 (2007) ............ 17-18

Estreicher, Samuel & Revesz, Richard L..,

Nonacquiescence by Federal Administrative

Agencies, 98 Yale L.J. 679 (1989) ......... 22-23

Green, Michael Z..,

Tackling Employment Discrimination with

ADR: Does Mediation Offer a Shield for the

Haves or Real Opportunity for the Have-Nots?,

26 Berkeley J. Emp. & Lab. L. 321 (2005) ..... 13

xll

TABLE OF AUTHORITIES—Continued

Page

Henderson, Jr., James A.,

The Lawlessness of Aggregative Torts,

34 Hofstra L. Rev. 329 (2005)............... 11

Le Roy, Michael H..,

Getting Nothing for Something: When Women

Prevail in Employment Arbitration Awards,

16 Stan. L. & Pol’y Rev. 573 (2005) .......... 13

LeRoy, Michael H. & Feuille, Peter,

Happily Never After: When Final and Binding

Arbitration Has No Fairy Tale Ending,

13 Harv. Negot. L. Rev. 167 (2008) .......... 12

Leslie, Christopher R..,

A Market-Based Approach to

Coupon Settlements in Antitrust

and Consumer Class Action Litigation,

49 U.C.L.A. L. Rev. 991 (2002) ........... 13-14

Lopatka, Kenneth T.,

A Critical Perspective on the Interplay Between

Our Federal Labor and Arbitration Laws,

Se ee 5

Michela, Patrick E.,

Comment, “You May Have Already Won .. .”:

Telemarketing Fraud and the Need for a

Federal Legislative Solution,

Pe. | ee 16

Miller, Geoffrey P.,

Bargains Bicoastal: New Light on Contract

Theory, 31 Cardozo L. Rev. 1475 (2010) ...... 18

xill

TABLE OF AUTHORITIES—Continued

Page

Murov, Ellis B. & Aloisio, Beverly A.,

Arbitration of Employment Disputes

Before and After Circuit City,

Be Ce IED owe wee ccc vecees 14-15

Rutledge, Peter B.,

Whither Arbitration?, 6 Georgetown

J. of L. and Pub. Pol’y 549 (2008) ............ 12

Schwab, Stewart J. & Thomas, Randall S.,

An Empirical Analysis of CEO Employment

Contracts: What Do Top Executives Bargain

For?, 63 Wash. & Lee L. Rev. 231 (2006)... ... 18

Sherwyn, David, et al.,

Assessing the Case for Employment Arbitration:

A New Path for Empirical Research,

57 Stan. L. Rev. 1557 (2005) ............... 12

Stipanowich, Thomas J.,

The Multi-Door Contract and Other Possibilities,

13 Ohio St. J. on Disp. Resol. 303 (1998) ...... 13

Weston, Maureen A..,

Universes Colliding: The Constitutional

Implications of Arbitral Class Actions,

47 Wm. & Mary L. Rev. 1711 (2006) ......... 19

INTEREST OF AMICUS CURIAE

Pursuant to Supreme Court Rule 37, Pacific Legal

Foundation (PLF) respectfully submits this brief

amicus curiae in support of Petitioner, Epic Systems,

Inc., petitioner Ernst & Young LLP, and respondent

Murphy Oil USA." Founded over 40 years ago, PLF

litigates matters affecting the public interest at all

levels of state and federal court, representing the views

of thousands of supporters nationwide. Among other

things, PLF’s Free Enterprise Project defends the

freedom of contract, including the right of parties to

agree by contract to the process for resolving disputes

that might arise between them. To that end, PLF has

participated as amicus curiae in many important cases

involving contractual arbitration and class actions in

both the consumer and employment context. See, e.g.,

ABM Indus., Inc. v. Castro, 137 S. Ct. 82 (2016);

DIRECTV, Inc. v. Imburgia, 136 S. Ct. 463 (2015);

Oxford Health Plans LLC v. Sutter, 133 S. Ct. 2064

(2013); AT&T Mobility LLC v. Concepcion, 563 U.S.

333 (2011); D.R. Horton, Inc. v. National Labor

Relations Board, 737 F.3d 344 (6th Cir. 2013); and

Iskanian v. CLS Transp. Los Angeles, LLC, 59 Cal. 4th

348 (2014), cert. denied, 135 S. Ct. 1155 (2015).

' Pursuant to this Court’s Rule 37.3, all parties have consented to

the filing of this brief. Letters evidencing such consent have been

filed with the Clerk of the Court.

Pursuant to Rule 37.6, Amicus Curiae affirms that no counsel

for any party authored this brief in whole or in part, and no

counsel or party made a monetary contribution intended to fund

the preparation or submission of this brief. No person other than

Amicus Curiae, its members, or its counsel made a monetary

contribution to its preparation or submission.

INTRODUCTION AND

SUMMARY OF ARGUMENT

These consolidated cases ask this Court to

determine whether the “concerted activities” provision

of the National Labor Relations Act (NLRA), 29 U.S.C.

§ 157 (also known as “Section 7”), prohibits employers

and employees from agreeing to individual arbitral

resolution of workplace disputes; an agreement

generally protected by the Federal Arbitration Act

(FAA).

While federal law places some substantive limits

on the ability of adults to freely contract to arrange

their affairs, courts generally respect people’s rights to

determine the procedures by which they will resolve

their disputes. See H.K. Porter Co., Inc. v. NLRB, 397

U.S. 99, 108 (1970) (“One of the fundamental] policies”

underlying the NLRA is “freedom of contract.”). This

policy controls here as well. Section 7 does not create

a substantive, non-waivable right to pursue claims

unrelated to the NLRA on a class basis. Aggregation of

claims is a procedural choice, not a substantive right.

Under the FAA, employees and employers are free to

contract for dispute resolution in any manner that they

so desire, including individualized resolution without

an option for aggregated claims in a class action or

class arbitration procedure. AT&T Mobility, 563 U.S.

at 339. Because aggregation does not alter the

substance of an underlying claim, and because arbitral

resolution similarly does not alter the substance of an

underlying claim (even claims based on federal

statutes), employment contracts that require

individual arbitration must be upheld.

Moreover, there is nothing inherently wrong or

unfair with an employer requiring arbitration of work-

related disputes. This outlook, which reflects

congressional policy favoring arbitration, is codified in

the FAA. Buckeye Check Cashing, Inc. v. Cardegna,

546 U.S. 440, 443 (2006). Some job seekers may

appreciate the benefits of arbitration; others may want

to retain the right to go to court. Job seekers who place

a high value on the ability to go to court should seek

employment with an employer who does not require

arbitration. Similarly, a job seeker who places a high

value on the expressive nature of his sartorial style

should not apply for a job that requires a uniform.

Finally, these cases arise because of the NLRB’s

longstanding “policy of nonacquiescence,” a troubling

anti-constitutional doctrine in which executive

agencies refuse to comply with federal court decisions.

While this Court need not rule on the constitutionality

of the policy itself, it shapes the context in which these

consolidated cases arise.

For all these reasons, the decision below should be

reversed.

ARGUMENT

ARBITRATION OF WORKPLACE

DISPUTES REFLECTS CONTRACTUAL

FREEDOM PROTECTED BY THE FAA

A. Aggregate Litigation Is a Matter of

Procedure, Not a Substantive Right

The FAA provides that arbitration agreements are

“valid, irrevocable and enforceable, save upon such

grounds as exist at law or in equity for the revocation

of any contract.” 9 U.S.C. § 2. The Act also “mandates

that district courts ‘shall’ direct the parties to proceed

to arbitration on issues as to which an arbitration

agreement has been signed.” Dean Witter Reynolds,

Inc. v. Byrd, 470 U.S. 213, 218 (1985) (citing 9 U.S.C.

§§ 3, 4). Accordingly, “agreements to arbitrate must be

enforced, absent a ground for revocation of the

contractual agreement.” Jd. The FAA was designed “to

overrule the judiciary’s longstanding refusal to enforce

agreements to arbitrate.” Jd. at 219-20. In this case,

the NLRB’s hostility to individual arbitration recently

found refuge in two circuit courts.

Current law considers collective litigation,

however styled, to be a matter of procedure, not a

substantive right. This Court held in American

Express Co. v. Italian Colors Restaurant that the

antitrust Jaws and Federal Rule of Civil Procedure 23

do not counteract the procedural choices made by

parties in arbitration contracts. 133 S. Ct. 2304, 2310

(2013). See also Gilmer v. Interstate/Johnson Lane

Corp., 500 U.S. 20, 32 (1991); Deposit Guar. Nat'l Bank

v. Roper, 445 U.S. 326, 332 (1980) (“[T]he right of a

litigant to employ Rule 23 is a procedural right only,

ancillary to the litigation of substantive claims.”);

Walthour v. Chipio Windshield Repair, LLC, 745 F.3d

1326, 1336 (11th Cir. 2014) (“Congress’s decision to

specifically include the procedural right to a collective

action in the FLSA does not somehow transform that

procedural right into a substantive right.”).

In 14 Penn Plaza LLC v. Pyett, 556 U.S. 247, 269

(2009), this Court held that “the recognition that

arbitration procedures are more streamlined than

federal litigation is not a basis for finding the forum

somehow inadequate; the relative informality of

arbitration is one of the chief reasons that parties

select arbitration.” See also Circuit City Stores, Inc. v.

Adams, 532 U.S. 105, 123 (2001) (“The Court has been

quite specific in holding that arbitration agreements

can be enforced under the FAA without contravening

the policies of congressional enactments giving

employees specific protection against discrimination

prohibited by federal law.”); Gilmer, 500 U.S. at 26

(“[Bly agreeing to arbitrate a statutory claim, a party

does not forgo the substantive rights afforded by the

statute; it only submits to their resolution in an

arbitral, rather than a judicial, forum.”). In short,

plaintiffs do not forego any federal substantive rights

by arbitrating their disputes. Mitsubishi Motors Corp.

v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628

(1985). The agreement to arbitrate simply substitutes

one forum for another; plaintiffs “trade the procedures

and opportunity for review of the courtroom for the

simplicity, informality, and expedition of arbitration.”

Id.

The Board’s position, that an employee's

agreement to pursue employment disputes on an

individual basis violates a core purpose of the NLRA,

cannot be reconciled with the Board’s acceptance of

arbitration encompassed within collective bargaining

agreements. See, e.g., Olin Corp., 268 N.L.R.B. 573,

577 (1984); Spielberg Mfg. Co., 112 N.L.R.B. 1080,

1082 (1955) (After collectively bargained-for

arbitration, Board defers to arbitrators’ awards, even

when it would have decided the underlying statutory

issue differently.); Kenneth T. Lopatka, A Critical

Perspective on the Interplay Between Our Federal Labor

and Arbitration Laws, 63 S.C. L. Rev. 43, 48 (2011).

The Board’s differing approach to arbitration when

agreed to by unions versus individuals cannot stand.

This Court has consistently allowed and enforced

waivers of the right to strike, which waive employees’

rights to engage in concerted activity, where a “no-

strike” clause was part of a freely negotiated collective

bargaining agreement. Textile Workers Union of Am. v.

Lincoln Mills of Ala., 353 U.S. 448, 455 (1957) (“Plainly

the agreement to arbitrate grievance disputes is the

quid pro quo for an agreement not to strike.”); Boys

Mkts., Inc. v. Retail Clerks Union, Local 770, 398 U.S.

235, 238-39 (1970) (exclusive bargaining

representative may waive Section 7 rights of the

employees it represents in exchange for other

concessions); Mastro Plastics Corp. v. NLRB, 350 U.S.

270, 280-83 (1956) (same). This Court even implied an

agreement not to strike where a collective bargaining

agreement contains an arbitration provision.

Teamsters v. Lucas Flour Co., 369 U.S. 95, 104-05

(1962).

In these cases, this Court expressly held

arbitration to be procedural in nature. It should do so

here, in the context of individual workplace disputes,

because neither the NLRA nor FAA bars employees

from contracting to modify the procedures by which

they will resolve disputes about substantive rights.

B. The FAA Applies to Independent

Employment Contracts, Even in

Cases Involving Statutory Claims

To the extent that an employment contract

contains an arbitration clause, the FAA provides

special protection as a matter of substantive federal

law, reflecting congressional favor of this form of

alternative dispute resolution. Preston v. Ferrer, 552

U.S. 346, 349 (2008) (“The Act, which rests on

Congress’ authority under the Commerce Clause,

supplies not simply a procedural framework applicable

in federal courts; it also calls for the application, in

state as well as federal courts, of federal substantive

law regarding arbitration.”). See also AT&T Mobility,

563 U.S. at 339 (“Section 2 reflects a ‘liberal federal

policy favoring arbitration,’ and the ‘fundamental

principle that arbitration is a matter of contract.’

(citations omitted). The FAA generally applies to

contracts of employment except those involving

“transportation workers.” Circuit City Stores, Inc. v.

Adams, 532 U.S. 105, 119 (2001).

In enacting the FAA, Congress’s primary concern

was resolution of individual claims: “[T]he FAA’s

legislative history indicates that Congress was opening

the door to a particular kind of non-judicial dispute

resolution proceeding, and class arbitration is a

different kind of proceeding—apart from its

non-judicial nature, it has little in common with what

Congress approved in 1925.” David S. Clancy &

Matthew M. K. Stein, An Uninvited Guest: Class

Arbitration and the Federal Arbitration Act's

Legislative History, 63 Bus. Law. 55, 57 (Nov. 2007).

In this regard, congressional testimony by FAA

proponents described arbitration as “face to face” in

nature and prompt, inexpensive, and procedurally

streamlined. Jd. at 59-60. Arbitrations followed this

individual model for most of their existence.

As such, employees and employers may agree to

resolve wage-and-hour and other statute-based

disputes in arbitration. In Caley v. Gulfstream

Aerospace Corp., 428 F.3d 1359, 1367 (11th Cir. 2005),

cert. denied, 547 U.S. 1128 (2006), the plaintiff

asserted a Fair Labor Standards Act (FLSA) wage

claim against her employer, arguing that a binding

arbitration provision in her employment contract was

unconscionable because it precluded class actions. /d.

The Eleventh Circuit rejected that argument, on the

principle that “the fact that certain litigation devices

may not be available in an arbitration is part and

parcel of arbitration’s ability to offer ‘simplicity,

informality, and expedition.” Jd. (citation omitted).

Other courts came to the same conclusion.’

This Court has considered the interaction of the

FAA with other federal statutes that provide

substantive causes of action, and in each case, so long

as aggrieved individuals can pursue their claims in

arbitration, there is no diminution in the substantive

rights offered by the statutes. See Circuit City, 532

U.S. at 123 (arbitration required of claims arising out

of California’s Fair Employment and Housing Act and

state common law tort claims); Gilmer, 500 U.S. at 26

(federal age discrimination claim was arbitrable);

Mitsubishi Motors Corp. v. Soler Chrysler-Plymouth,

Inc., 473 U.S. 614, 628 (1985) (antitrust claims arising

2 See Slawienski v. Nephron Pharm. Corp., No. 1:10-CV-0460-

JEC, 2010 WL 5186622, at *3 (N.D. Ga. Dec. 9, 2010) (plaintiffs

pursuing FLSA claims in an attempt to collect allegedly unpaid

overtime wages are bound by arbitration, notwithstanding

argument that mandatory arbitration was an unfair labor practice

under the NLRA); Grabowski v. C. H. Robinson Co., 817 F. Supp.

2d 1159, 1169 (S.D. Cal. 2011) (“[T]he NLRA does not operate to

invalidate or otherwise render unenforceable the arbitration

provisions of the Bonus Incentive Agreements [containing a class-

action waiver] signed by Plaintiff.”); Walker v. Ryan’s Family

Steak Houses, Inc., 400 F.3d 370, 377 (6th Cir. 2005) (statutory

claims may be the subject of an arbitration agreement, including

claims under the FLSA); Winn v. Tenet Healthcare Corp., No. 2:10-

CV-02140-JPM, 2011 WL 294407, at *2 & n.2 (W.D. Tenn. Jan. 27,

2011) (finding FLSA claim subject to arbitration and collecting

cases reaching same conclusion); Aracri v. Dillard’s, Inc., No. 1:10-

CV-253, 2011 WL 1388613, at *4 (S.D. Ohio Mar. 29, 2011) (same).

out of the Sherman Act are arbitrable). For example, in

Gilmer, the Court considered whether a claim under

the Age Discrimination in Employment Act of 1967

(ADEA) could be subjected to compulsory arbitration

pursuant to an arbitration agreement in a securities

registration application. 500 U.S. at 23. The Court

upheld the arbitration agreement, finding that nothing

in the text of the ADEA forbade resolution by

arbitration, and that such resolution presented no

inherent conflict with the purposes of the ADEA. Jd. at

26.° See also Bender v. A. G. Edwards & Sons, Inc., 971

F.2d 698, 700 (11th Cir. 1992) (sexual harassment

claims under Title VII are arbitrable); Weeks v. Harden

Mfg. Corp., 291 F.3d 1307, 1313 (11th Cir. 2002)

(“Courts have consistently found that claims arising

under federal statutes may be the subject of arbitration

agreements and are enforceable under the FAA.”).

This Court similarly held that arbitration

contracts in the employment context present no conflict

with the Sherman Act, the Securities Exchange Act of

1934, the Racketeering Influenced and Corrupt

Organizations Act, and the Securities Act of 1933. The

bottom line is that “[s]o long as the prospective litigant

effectively may vindicate [his or her] statutory cause of

action in the arbitral forum, the statute will continue

to serve both its remedial and deterrent function.”

Mitsubishi Motors, 473 U.S. at 637 (addressing the

Sherman Act); see also Circuit City, 532 U.S. at 123

(“[A]rbitration agreements can be enforced under the

° Cf. Bailey v. Ameriquest Mortg. Co., 346 F.3d 821, 823 (8th Cir.

2003) (“The [United States Supreme] Court upheld the

arbitrability of federal age discrimination claims in Gilmer ...and

the age discrimination statute there at issue had borrowed its

remedial provisions from the previously enacted FLSA.”).

FAA without contravening the policies of congressional

enactments giving employees specific protection

against discrimination prohibited by federal law; as we

noted in Gilmer, ‘by agreeing to arbitrate a statutory

claim, a party does not forgo the substantive rights

afforded by the statute; it only submits to their

resolution in an arbitral, rather than a judicial,

forum.’ ” (citation omitted)); Shearson/American

Express, Inc. v. McMahon, 482 U.S. 220, 222 (1987)

(arbitration upheld with regard to Securities Act of

1934 and RICO claims); Rodriguez de Quijas v.

Shearson/American Express, Inc., 490 U.S. 477, 481

(1989) (upholding arbitration of claims arising under

the Securities Act of 1933).

These decisions reflect the Court’s consensus that

individual resolution of claims in arbitration provides

full relief to claimants. This premise follows from the

general rule regarding collective adjudication: The

substantive rights at issue in a lawsuit are not altered

by aggregating claims, such as in class action

litigation. See, e.g., Amchem Prods., Inc. v. Windsor,

521 U.S. 591, 613 (1997) (“Rule 23’s requirements

must be interpreted in keeping with . . . the Rules

Enabling Act, which instructs that rules of procedure

‘shall not abridge, enlarge or modify any substantive

right.’” (citation omitted)); Microsoft Corp. v. Baker,

582 U.S. __, No. 15-457, slip op. at 4 (June 12, 2017)

(Thomas, J., concurring in the judgment) (Class

“allegations are simply the means of invoking a

procedural mechanism that enables a plaintiff to

litigate his individual claims on behalf of a class.”)

(citation omitted).

For example, the elements of a tort claim remain

the same regardless of whether plaintiffs proceed

individually or jointly, in a unified trial or in separate

bifurcated proceedings. Alabama v. Blue Bird Body

Co., Inc., 573 F.2d 309, 318 (5th Cir. 1978). Similarly,

changing the rules for proof of damages depending on

whether a lawsuit is brought on behalf of an individual

plaintiff or aggregates many plaintiffs in a class action

would improperly alter substantive rights. Windham

v. Am. Brands, Inc., 565 F.2d 59, 66 (4th Cir. 1977); see

also James A. Henderson, Jr., The Lawlessness of

Aggregative Torts, 34 Hofstra L. Rev. 329 (2005)

(“[W]hile class actions sacrifice individual autonomy in

collective claiming processes to achieve consistent

outcomes and economies of scale, the underlying claims

remain individual in nature.”).

The FAA and the federal substantive law of

arbitration protect individual rights to freely choose

the method of dispute resolution, in the workplace and

elsewhere. The NRLB’s determination to eliminate this

individual right cannot be countenanced.

INDIVIDUAL ARBITRATION OF

WORKPLACE DISPUTES IS BOTH

COMMON AND FAIR

A. Empirical Studies Show

That Individual Arbitration

Has Fair Results

Suspicion against an arbitral forum is

unwarranted on the mere basis that arbitration

operates under procedures that differ from court rules.

14 Penn Plaza, 556 U.S. at 269 (“[T]he recognition that

arbitration procedures are more streamlined than

federal litigation is not a basis for finding the forum

somehow inadequate; the relative informality of

arbitration is one of the chief reasons that parties

select arbitration.”). There is, moreover, no evidence

that arbitration is worse than litigation at achieving

just results. In fact, arbitrators decide cases much as

judges do, and without the distortions common in cases

tried to juries. Steven J. Burton, The New Judicial

Hostility to Arbitration: Federal Preemption, Contract

Unconscionability, and Agreements to Arbitrate, 2006

J. Disp. Res. 469, 480 n.86 (citing Christopher R.

Drahozal, A Behavioral Analysis of Private Judging, 67

Law & Contemp. Probs. 105, 107 (2004)).*

Studies show that “plaintiffs do not fare

significantly better in litigation, that arbitration

provides a quicker resolution than litigation, and that

available data do not indicate whether damages are

fairer under either system.” Jd. at 480-81 n.87 (citing

David Sherwyn, et al., Assessing the Case for

Employment Arbitration: A New Path for Empirical

Research, 57 Stan. L. Rev. 1557, 1564 (2005)). Multiple

studies have found that workers who pursue their

claims in arbitration prevail more frequently than

those who pursue their claims in court. See Rutledge,

Whither Arbitration?, 6 Georgetown J. of L. and Pub.

Poly at 551 (“arbitration generally results in higher

win rates and higher awards for employees than

litigation”); Michael H. LeRoy & Peter Feuille, Happily

Never After: When Final and Binding Arbitration Has

No Fairy Tale Ending, 12 Harv. Negot. L. Rev. 167,

184 (2008).

* Arbitration is only one means of alternative dispute resolution.

Mediation is used more frequently than arbitration, by a wide

measure. Peter B. Rutledge, Whither Arbitration, 6 Geo. J. L. &

Pub. Pol’y 549, 555 (2008) (citing multiple studies).

One study found that female employees prevailed

in arbitration much more often than similarly situated

women in litigation, though the amounts of the awards

were lower. Michael H. LeRoy, Getting Nothing for

Something: When Women Prevail in Employment

Arbitration Awards, 16 Stan. L. & Pol’y Rev. 573,

589-90 (2005). Another study of construction industry

arbitration found that “[w]hen it came to perceived

fairness in decisionmaking, arbitrators generally

compared favorably with judges and juries. On

average, moreover, arbitration was a speedier means

of dispute resolution than either jury trial or bench

trial, and somewhat less costly overall.” Thomas J.

Stipanowich, The Multi-Door Contract and Other

Possibilities, 13 Ohio St. J. on Disp. Resol. 303, 339

(1998) (internal citations omitted)). Thus, employees

reasonably may prefer to resolve their claims in

arbitration. See Michael Z. Green, Tackling

Employment Discrimination with ADR: Does Mediation

Offer a Shield for the Haves or Real Opportunity for the

Have-Nots?, 26 Berkeley J. Emp. & Lab. L. 321, 327-30

(2005) (noting potential benefits for employees in

pursuing arbitration given the harsh results presented

by the court system).

When arbitration is equally likely to end in a just

result as a lawsuit, it cannot be deemed “unfair” for

employees to arbitrate employment disputes on an

individual basis.° Therefore, it is not “unfair” for

° Class actions or arbitrations should not be presumed to offer any

particular advantages either, given that many class actions result

in a settlement of minimal value to class members, much of which

is unclaimed given the need for class members to complete

affirmative steps to obtain their remedy. See Christopher R.

Leslie, A Market-Based Approach to Coupon Settlements in

(continued...)

employees and employers to contract for that specific,

individual method of arbitration.

B. An Employer’s Requirement

of Individual Arbitration of

Workplace Disputes Should Be

Viewed in the Same Manner as

Any Other Potential Trade-Off

The FAA directs courts to place arbitration

agreements on equal footing with other contracts, and

it “does not require parties to arbitrate when they have

not agreed to do so.” Equal Employment Opportunity

Comm'n v. Waffle House, Inc., 534 U.S. 279, 293

(2002), a directive that applies with equal force to class

arbitration. Meanwhile, people do not have any

fundamental right to work for a specific employer. See

Massachusetts Bd. of Retirement v. Murgia, 427 U.S.

307, 313 (1976); Kubik v. Scripps College, 118 Cal. App.

3d 544, 549 (1981) (upholding mandatory retirement

for university professors in part because “there is no

fundamental right to work for a particular employer,

public or private”). Thus, in looking for a job,

applicants consider the various perceived benefits and

burdens of each particular employment opportunity.

While the FAA demands that courts apply a

neutral view of the availability of arbitral remedies,

indi vidual job applicants may perceive arbitration (or

other alternative dispute resolution procedures)

favorably or unfavorably. See Ellis B. Murov & Beverly

A. Aloisio, Arbitration of Employment Disputes Before

and After Circuit City, 17 Lab. Law. 327, 343 n.151

® (...continued)

Antitrust and Consumer Class Action Litigation, 49 U.C.L.A. L.

Rev. 991, 994 (2002).

(2001) (noting questions of bias where employers are

repeat players in arbitration, and further noting that

unions also are repeat players, representing workers

under collective bargaining agreements). In this way,

an arbitration requirement is no different than many

other job requirements that affect individual

preferences, and even legally protected rights.

When contemplating where to work, job-seekers

contemplate all manner of trade-offs. Some employers

offer shifts that start very early in the morning, on

weekends, or extend quite late at night. Employers

may require workers to wear uniforms’ or costumes,”

® See, e.g., Turco v. Hoechst Celanese Chem. Group, Inc.,101 F.3d

1090, 1091 (5th Cir. 1996) (Plaintiff “worked a rotating shift, as

there was no ‘day shift’ for any process operator, and was

routinely required to work through the night.”); Cooper Tire &

Rubber Co. v. NLRB, 957 F.2d 1245, 1248 n.4 (5th Cir. 1992)

(“Employees are assigned to four groups. Each group is required

to work seven consecutive days in each shift: 7 a.m. to 3 p.m. (day

shift); 3 p.m. until 11 p.m. (afternoon shift); and 11 p.m. to 7 a.m.

(night shift).”).

” See, e.g., Commc’ns Workers of Am. v. Ector Cty. Hosp. Dist., 467

F.3d 427, 431 (5th Cir. 2006) (“Under the Hospital’s established

dress code policy, all employees were and are required to wear a

uniform while on duty.”); Herman v. Express Sixty-Minutes

Delivery Serv., Inc., 161 F.3d 299, 302 (5th Cir. 1998) (delivery

truck company employee drivers are required to wear a uniform).

* See, e.g., Reich v. Circle C Inus., Inc., 998 F.2d 324, 330 (5th Cir.

1993) (noting that employee dancers, disc jockeys and waitresses

wore “costumes and uniforms”); Kutrom Corp. v. City of Center

Line, 979 F.2d 1171, 1171 (6th Cir. 1992) (health club masseuses

required to wear “harem costumes”); Hill v. Moskin Stores, Inc.,

159 A.2d 299, 300 (Del. Super. Ct. 1960) (porter required to wear

“snowman” costume and pass out candy to children outside the

store).

refrain from certain personal adornments,” or stick to

a script when speaking to customers.'® Some

employers demand a heavy travel schedule'’ or require

workers to report for duty on holidays.” Potential

® See Cloutier v. Costco Wholesale Corp., 390 F.3d 126, 135-36 (1st

Cir. 2004), cert. denied, 545 U.S. 1131 (2005) (finding that it would

constitute an undue hardship to require Costco to modify its

no-facial-jewelry policy as a reasonable accommodation for an

employee who claimed membership in the Church of Body

Modification, given Costco’s determination that facial piercings

detract from the “neat, clean and professional image” that it aimed

to cultivate).

"” Seripted communications are standard practice in the

telecommunications industry. See Patrick E. Michela, Comment,

“You May Have Already Won .. .”: Telemarketing Fraud and the

Need for a Federal Legislative Solution, 21 Pepp. L. Rev. 553, 560

(1994) (“[Tjelemarketers encourage, or sometimes require,

fronters to read verbatim from a script provided by the

telemarketer that is designed to induce the customer to buy the

product or service being offered. A typical script allows the

recipient of the phone call to ask questions and provide certain

information to the salesperson. The script provides the fronter

with different messages to read depending on the customer’s

responses to the questions posed by the fronter.” (citations

omitted)).

" See Noble Drilling Co. v. Drake, 795 F.2d 478, 480 (6th Cir.

1986) (plaintiff's job “entailed extensive travel by helicopter to

offshore drilling rigs where he inspected the rigs, showed safety

films and spoke to groups of employees on subjects related to

safety.”); Johnson v. RGIS Inventory Specialists, 554 F. Supp. 2d

693, 705 (E.D. Tex. 2007) (“extensive travel was ‘a contemplated,

normal occurrence’ of Johnson's employment at RGIS because she

accepted the job with the understanding that she would be

working in diverse store locations.”).

" These include such public service industries as police officers,

Perry v. Ft. Lauderdale, 352 So. 2d 1194, 1195 (Fla. Dist. Ct. App.

(continued...)

workers weigh the trade-offs of various places of

employment every day, accepting some offers and

declining others.

A job applicant who disdains arbitration as a

dispute resolution mechanism can look for work with

employers who do not require arbitration as a

condition of employment. See Nationa! Union Fire Ins.

Co. of Pittsburgh, Pennsylvania v. Guardtronic, Inc., 76

Ark. App. 313, 320 (2002) (party to a contract may

voluntarily accept even non-negotiable provisions

because the party remains free to take his business

elsewhere); Marin Storage & Trucking, Inc. v. Benco

Contracting & Engineering, Inc., 89 Cal. App. 4th 1042,

1056 (2001) (moting, in discussion of procedural

unconscionability, that plaintiff could take his business

elsewhere if he did not like the contract terms one

vendor provided). Class action arbitration waivers

have been adopted by some companies, but they are far

from universal. See Theodore Eisenberg & Geoffrey P.

Miller, The Flight from Arbitration: An Empirical

Study of Ex Ante Arbitration Clauses in The Contracts

of Publicly Held Companies, 56 DePaul L. Rev. 335,

348 (2007). Professors Eisenberg and Miller studied

contracts made by 2,858 publicly held companies

during a seven-month period in 2002, including 111

specifically identified “employment contracts.” About

63% of the employment contracts did not mandate

@ (...continued)

1977); City of McAllen v. Zellers, 216 S.W.3d 913, 914 (Tex. 2007),

firefighters, Miami v. Gioia, 215 So. 2d 780, 782 (Fla. 1968);

Perrodin v. City of Lafayette, 696 So. 2d 223, 224 (La. 1997), and

hospital workers, Lester v. Sec’y of Veterans Affairs, 514 F. Supp.

2d 866, 876 (W.D. La. 2007), as well as certain private sector

industries, NLRB v. Houston Chronicle Publ’g. Co., 300 F.2d 273,

277 (5th Cir. 1962) (some newspaper employees work on holidays).

arbitration. IJd.'* Another study of employment

contracts for senior executives found about 58% did not

mandate arbitration of workplace disputes. Stewart J.

Schwab & Randall S. Thomas, An Empirical Analysis

of CEO Employment Contracts: What Do Top

Executives Bargain For?, 63 Wash. & Lee L. Rev. 231,

234 (2006).

Employers may require a particular type of

dispute resolution, but as a practical matter, this is no

different than other aspects of employment that are

not open to negotiation. For example, employers may

offer a particular 401(k) matching plan, or a specific

type of health insurance. These aspects of employment

are determined unilaterally by the employer and a

potential employee who is looking for a particular

benefits package may have to shop around or may

simply conclude that the ideal package is unavailable

in his market. In viewing the wide variety of trade-offs

that exists in the acceptance of any job, an individual

who highly values class-based dispute resolution, or

who does not want to arbitrate workplace disputes at

all should not apply to work for a company that

requires it.

'S Eisenberg and Miller also learned that arbitration clauses were

more common in contracts that also had a choice-of-law provision

specifying use of California law. Id. at 358-61. See also Geoffrey P.

Miller, Bargains Bicoastal: New Light on Contract Theory, 31

Cardozo L. Rev. 1475, 1522 (2010) (comparing New York’s contract

law approach to arbitration as “formalistic, literalistic,

nonjudgmental, and deferential to the freedom of parties to

bargain for mutual advantage” with California courts’ approach

that elevates judge’s perceptions of “context, morality, and

fairness” over “the written agreement of the parties.”).

C. In Stark Contrast to Individual

Arbitration, Class Arbitration Creates