The Arbitration Struggle Continues: One (more) Courageous Judge Stands Up For Workers

The Chinese philosopher Laozi is reputed to have said that a journey of a thousand miles begins with a single step.  A corollary is that a long journey only continues if people are courageous enough to continue it, despite the daunting odds they may face.

A California federal judge recently joined the group of jurists who have been courageous enough to push back against the efforts to force workers and consumers out of court and into binding arbitration.  The ills and abuses associated with employment arbitration are well documented, and will not be revisited here.  (The New York Times ran an excellent series about those ills and abuses in 2015, which revealed that Chief Justice John Roberts of the United States Supreme Court was among the attorneys who came up with the legal strategy of forcing people into arbitration.)  But it is encouraging that the struggle over arbitration is far from over, and there are some glimmers of hope for workers.

In Totten v. Kellogg Brown & Root, U.S. District Judge Dolly M. Gee denied defendant KBR’s motion to compel individual arbitration in a wage and hour class action.  Judge Gee did so despite the fact that the plaintiff had signed an agreement to arbitrate his grievances in an individual manner.  Judge Gee based her order on the D.R. Horton, Inc. case, a decision of the National Labor Relations Board.  In D.R. Horton, the Board found that class actions are protected concerted activity under the National Labor Relations Act (NLRA).  As such, private agreements that ban such class actions are unenforceable.

The thing about D.R. Horton is that its analysis is absolutely correct.  Section 7 of the NLRA provides that:

Employees shall have the right to engage in concerted activities for the purpose of collective bargaining, or other mutual aid or protection.

How is a class action not a “concerted activity” for the purpose of “mutual aid”?  And if it is, then how can employers require their workers to give up their right to bring class actions, and instead require them to pursue their individual claims only in a private forum, with no judge, no jury, and often no publicity?  On its face, this situation seems no different than requiring workers to give up their right to form a union.  That type of agreement is referred to as a “Yellow Dog Contract”  Yellow Dog Contracts have been illegal since the Norris-LaGuardia Act was enacted in 1932.

Judge Gee’s decision runs counter to the analysis of most judges in federal and California.  (The California Supreme Court rejected it in the case of Iskanian v. CLS Transportation.)  As such, it was a courageous step, and a critical one in the long struggle against forced arbitration.