Argued: November 30, 2016
Application for Enforcement of a Final Decision and Order of
the National Labor Relations Board. No. 07-CA-144404.
Heller, NATIONAL LABOR RELATIONS BOARD, Washington, D.C., for
Petitioner. Timothy J. Ryan, JACKSON LEWIS P.C., Grand
Rapids, Michigan, for Respondent.
Craig Becker, AFL-CIO, Washington, D.C., Evan M. Tager, MAYER
BROWN LLP, Washington, D.C., for Amici Curiae.
Dreeben, Kira Dellinger Vol, Gregoire Sauter, NATIONAL LABOR
RELATIONS BOARD, Washington, D.C., for Petitioner. Timothy J.
Ryan, JACKSON LEWIS P.C., Grand Rapids, Michigan, for
Craig Becker, AFL-CIO, Washington, D.C., Evan M. Tager, MAYER
BROWN LLP, Washington, D.C., Michael Rubin, ALTSHULER BERZON
LLP, San Francisco, California, for Amici Curiae.
Before: MOORE, SUTTON, and WHITE, Circuit Judges.
NELSON MOORE, Circuit Judge.
National Labor Relations Board (NLRB) seeks enforcement of a
Decision and Order of the NLRB finding that Respondent
Alternative Entertainment, Inc. (AEI) violated the National
Labor Relations Act (NLRA). AEI seeks relief from the order.
The NLRB argues that AEI violated the NLRA by barring
employees from pursuing class-action litigation or collective
arbitration of work-related claims. The NLRB also contends
that AEI violated the NLRA by forbidding James DeCommer, an
AEI technician, from discussing a proposed compensation
change with his coworkers and by firing DeCommer for
discussing the proposed change and complaining to management
about it. For the reasons discussed below, we ENFORCE the
NLRB's Decision and Order.
worked as a field technician for AEI from August 2006 until
he was fired on December 18, 2014. Administrative Record
("A.R.") (Hr'g Tr. at 13) (Page ID #19). AEI
provides Dish Network installation and services. Id.
at 87 (Page ID #93).
employment documents are at issue in this case. First, AEI
requires its employees to sign an agreement entitled
"AEI ALTERNATIVE ENTERTAINMENT, INC. OPEN DOOR POLICY
AND ARBITRATION PROGRAM, " which states that
"Disputes between you and AEI (or any of its affiliates,
officers, directors, managers or employees) relating to your
employment with the Company" must, at the election of
the employee or the company, be resolved "exclusively
through binding arbitration." A.R. ("Open Door
Policy and Arbitration Program" at 1) (Page ID # 209).
The agreement also states that "By signing this policy,
you and AEI also agree that a claim may not be arbitrated as
a class action, also called 'representative' or
'collective' actions, and that a claim may not
otherwise be consolidated or joined with the claims of
others." Id. Second, AEI maintains an employee
handbook, which lists "examples . . . intended to
demonstrate the types of behaviors prohibited by the
company." A.R. (Employee Handbook at 27) (Page ID #196).
Examples include "[u]nauthorized disclosure of business
secrets or confidential business or customer information,
including any compensation or employee salary
information." Id. at 28 (Page ID #197).
central dispute in this case stems from changes in field
technicians' compensation. AEI compensates technicians
using a "unit-based compensation system." A.R.
(Hr'g Tr. at 17) (Page ID #23). AEI assigns each type of
job a certain number of units. For example, "a trouble
call or a service call . . . would be considered 12 units,
" and technicians receive compensation for each unit of
work they perform. Id. Different technicians receive
different per-unit compensation rates, ranging from
approximately $1.90 per unit to approximately $4.00 per unit.
Id. at 18 (Page ID #24). AEI determines each
technician's per-unit compensation rate based on the
technician's metrics, including factors like the number
of jobs a technician completed, how frequently customers
reported problems after a technician performed installations,
and the technician's customer satisfaction ratings.
DeCommer was employed at AEI, the company made two changes to
the compensation structure. First, AEI added smart home
service sales as a metric for all technicians.
Id. Smart home sales were additional services, such
as mounting a customer's television on the wall or
selling accessories to complement a customer's home
entertainment system, that technicians sold during service
calls. Id. at 20 (Page ID #26). AEI began requiring
technicians to meet a minimum dollar amount of smart home
service sales in order to increase their pay per unit
(initially the threshold was $6.00 per call and it later
increased to $10.00 per call). Id.
first, DeCommer excelled at smart home sales and in 2013 and
2014 he broke company records. Id. at 39, 48 (Page
ID #45, 54). Later, he determined that he was losing money by
spending time on smart home sales instead of going on more
service calls, so his smart home sales numbers dropped off
significantly. Id. at 40-41 (Page ID #46-47). There
is some dispute about how DeCommer handled smart home sales
after he stopped trying to break company records. DeCommer
testified that he told his supervisor that he would continue
to meet the minimum dollar amount in smart home sales but
that he was no longer motivated to break records.
Id. at 40-41 (Page ID #46-47). Specifically, he
testified that he said, "I'll make sure I hit my
goal. I'm not going to miss that, but I'm not going
to be pushed to be number one every month. . . . I actually
lost money by doing that." Id. at 40 (Page ID
#46). DeCommer's supervisor, Victor Humphrey, testified
that on or around December 17, 2014 DeCommer told him he
would not do smart home sales and that "he made the
comment . . . that he talks his customers out of
services." Id. at 95-96 (Page ID #101-02).
Humphrey testified that after hearing this comment he was
"in shock . . . [b]ecause I had an employee that just
refused to do his job to his boss." Id. at
96-97 (Page ID #102-03). DeCommer, however, denied that he
had a conversation with Humphrey on December 17, and also
denied ever refusing to do Smart Home Sales. Id. at
130 (Page ID #136).
second change affected compensation only for technicians who,
like DeCommer, drove their own vehicles. A.R. (Hr'g Tr.
at 14) (Page ID #20). AEI employs field technicians who drive
personally owned vehicles (POV technicians or POVs) and field
technicians who drive company owned vehicles (COV technicians
or COVs). In November or December 2014, AEI announced it
would begin compensating POVs for using their own vehicles
based on mileage, not based on units. A.R. (12/15/2014 Email
from Neal Maccoux) (Page ID #306); A.R. (Hr'g Tr. at 43)
(Page ID #49). Under the old system, POVs received a
supplement of $0.82 per unit to compensate them for the cost
of driving their own vehicles. A.R. (Hr'g Tr. at 26)
(Page ID #32). Under the new system,  POVs would be compensated
$0.575 per milebased on the miles driven from their first
to their last job. A.R. (12/15/2014 Email from Neal Maccoux)
(Page ID #306); A.R. (Hr'g Tr. at 43) (Page ID #49).
DeCommer determined that he would "lose a lot of
money" under this new system, estimating the change
would cost him seven to ten thousand dollars per year, or
about twenty percent of his total compensation. A.R.
(Hr'g Tr. at 25, 26, 31) (Page ID #31, 32, 37).
repeatedly voiced his concern about the proposed compensation
change. DeCommer testified that he spoke with "probably
10 technicians or more" about the change and
"[t]hey were concerned that they were going to lose
money, that this pay was going to stop their proper
compensation of driving their vehicle." Id. at
23 (Page ID #29). DeCommer testified that he had an in-person
conversation about the proposed change with manager Rob
Robinson. DeCommer testified that he "asked [Robinson]
if he knew anything more about the pay change" to which
"[Robinson] said, why don't we talk outside, because
there were some other technicians in that general office
area. . . . [I]t was at that point that Mr. Robinson told me
that I don't want you talking to any of the other
technicians about this; if you have any concerns or
questions, I want you to direct them to myself or Mr.
Humphrey." Id. at 28 (Page ID #34). DeCommer
also testified that he discussed with other technicians the
contents of the conversation with Robinson. Id. In
addition, DeCommer sent a text message to Robinson and an
email to the company president, Tom Burgess, criticizing the
proposed change. A.R. (12/5/2014 Text Message) (Page ID
#212); A.R. (12/16/2014 Email from James DeCommer) (Page ID
#213). In the email to Burgess, DeCommer discussed the impact
on his personal compensation and the compensation of other
POVs. DeCommer repeatedly referred to the POVs collectively,
saying that "[g]enerally speaking the povs are the
highest p[er]formers and the most profitable of your tech
force" and that the change would "unintentionally
screw over almost [the] entire pov tech force." A.R.
(12/16/2014 Email from James DeCommer) (Page ID #213). He
says of the impact on POVs, "what you are asking myself
and all the other povs to do is to accept a 20% pay
cut." Id. (Page ID #214-15). DeCommer also
included a discussion of the tax implications for POVs with
different filing statuses. Id. (Page ID #214).
Finally, Robinson set up a telephone conversation on or
around December 16, 2014 between DeCommer and company CFO
Neal Maccoux where DeCommer again expressed his concerns.
A.R. (Hr'g Tr. at 30) (Page ID #36). In that
conversation, DeCommer explained to Maccoux that he had
"talked with other employees and that they had done
their own figures and found that they would lose quite a bit
of money as well if this change were to go through."
Id. at 32 (Page ID #38). DeCommer testified that he
informed other technicians-"anywhere from 5 to 10"
of them, "[p]robably closer to 10"-about the
discussion with Maccoux. Id. at 36 (Page ID #42).
fired DeCommer on December 18, 2014. DeCommer testified that
on December 18, General Manager Victor Humphrey said to
DeCommer, "our relationship is not working out" and
fired him. Id. at 38 (Page ID #44). DeCommer asked,
"well, is it due to my job performance?" to which
Humphrey responded, "no, our relationship is not working
out." Id. Humphrey's testimony about their
December 18 conversation mirrors DeCommer's, but Humphrey
additionally testified that he made the decision to fire
DeCommer the day before because DeCommer told Humphrey that
he was not going to do smart home sales. Id. at
96-98 (Page ID #102-04). On the AEI Employee Separation
Document, in response to "REASON FOR SEPARATION, "
Humphrey wrote, "Relationship is not working out."
A.R. (AEI Employee Separation Document) (Page ID #224). In
response to the question, "DID THEY WORK TO THE BEST OF
THEIR ABILITY?" Humphrey wrote, "No, Did not work
to his potential in Smart Home Services consistently."
Id. In response to "OTHER COMMENTS"
Humphrey wrote, "Consi[s]tently had a bad
filed charges and then amended charges against AEI with the
NLRB. A.R. (First Amended Charge) (Page ID #147). The
NLRB's General Counsel issued a complaint on March 26,
2015. A.R. (Compl. at 4) (Page ID #156). Administrative law
judge (ALJ) Michael A. Rosas issued a recommended decision on
July 9, 2015 finding that AEI violated the NLRA. A.R.
(Decision & Order at 10-11) (Page ID #350-51); Alt.
Entm't, Inc., 363 N.L.R.B. 131, 2016 WL 737010, at
*5 (Feb. 22, 2016). On February 22, 2016, the NLRB, by
Chairman Pearce and Members Miscimarra and McFerran, adopted
the ALJ's findings of fact and legal analysis and adopted
with amendments the ALJ's conclusions of law. Alt.
Entm't, Inc., 2016 WL 737010, at *1. The amended
conclusions of law stated:
(1) By (1) prohibiting James DeCommer from discussing his
concerns over changes in compensation with coworkers; (2)
implementing rules prohibiting unauthorized disclosure of
employee compensation and salary information; and (3)
compelling employees, as a condition of employment, to sign
arbitration agreements waiving their right to pursue class or
collective actions in all forums, arbitral and judicial, the
Respondent has violated Section 8(a)(1) of the Act. . . .
(2) By discharging James DeCommer for engaging in protected
activity, including discussing his concerns about salary,
wages, or compensation structures with his coworkers and
bringing complaints about those issues to management, the
Respondent has violated Section 8(a)(1) of the Act.
Id. Member Miscimarra filed a separate opinion
concurring in part and dissenting in part. Id. at
*3. The NLRB filed an application for enforcement of the
order on March 30, 2016.
jurisdiction to review the NLRB's Decision and Order
pursuant to 29 U.S.C. § 160(e), (f). We "review
the factual determinations made by the NLRB under the
substantial evidence standard." NLRB v. Local 334,
Laborers Int'l Union, 481 F.3d 875, 878-79 (6th Cir.
2007). "The deferential substantial evidence standard
requires this court to uphold the NLRB's factual
determinations if they are supported by 'such relevant
evidence as a reasonable mind might accept as adequate to
support a conclusion.'" Id. at 879 (quoting
NLRB v. Pentre Elec., Inc., 998 F.2d 363, 368 (6th
Cir. 1993)). "When there is a conflict in the testimony,
'it is the Board's function to resolve questions of
fact and credibility, ' and thus this court ordinarily
will not disturb credibility evaluations by an ALJ who
observed the witnesses' demeanor." Turnbull Cone
Baking Co. v. NLRB, 778 F.2d 292, 295 (6th Cir. 1985)
(quoting NLRB v. Baja's Place, 733 F.2d 416, 421
(6th Cir. 1984)). We review the NLRB's application of the
law to facts under the substantial evidence standard.
Id. We review the NLRB's legal conclusions de
novo; however, we defer to the NLRB's reasonable
interpretation of the National Labor Relations Act. Local
334, 481 F.3d at 879; Lechmere, Inc. v. NLRB,
502 U.S. 527, 536 (1992) ("Like other administrative
agencies, the NLRB is entitled to judicial deference when it
interprets an ambiguous provision of a statute that it
administers."); NLRB v. United Food & Commercial
Workers Union, Local 23, 484 U.S. 112, 123 (1987)
(applying Chevron deference to the NLRB's
interpretation of the NLRA).
AEI'S BAR ON COLLECTIVE ARBITRATION OF WORK-RELATED
NLRB concluded that AEI violated the NLRA by maintaining a
company policy requiring employees to agree that disputes
"relating to . . . employment with the company"
must be resolved "exclusively through binding
arbitration" and further agreeing that "a claim may
not be arbitrated as a class action, also called
'representative' or 'collective'
actions" or "otherwise be consolidated or joined
with the claims of others." A.R. ("Open Door Policy
and Arbitration Program" at 1) (Page ID #209). The NLRB
concluded that AEI's arbitration provision violated the
NLRA because it prevents employees from taking any concerted
legal action. Alt. Entm't, Inc., 2016 WL 737010,
at *1, 5.
arbitration provision that, like AEI's, prevents
employees from taking any concerted legal action implicates
two federal statutes, the Federal Arbitration Act and the
National Labor Relations Act. The Federal Arbitration Act, 9
U.S.C. §§ 1 et seq., states 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 FAA
"manifest[s]" a "liberal federal policy
favoring arbitration agreements." Mitsubishi Motors
Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614,
625 (1985). The FAA ensures that arbitration agreements are
as enforceable as any other contract. Buckeye Check
Cashing, Inc. v. Cardegna, 546 U.S. 440, 443 (2006). The
FAA does not, however, make arbitration agreements more
enforceable than other contracts-"[a]s the 'saving
clause' . . . indicates, the purpose of Congress . . .
was to make arbitration agreements as enforceable as other
contracts, but not more so." Prima Paint Corp. v.
Flood & Conklin Mfg. Co., 388 U.S. 395, 404 n.12
7 of the National Labor Relations Act, 29 U.S.C. §§
151 et seq., states that, "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. . . ." 29 U.S.C.
§ 157. Section 8 states that, "It shall be an
unfair labor practice for an employer . . . to interfere
with, restrain, or coerce employees in the exercise of the
rights guaranteed in section 157 of this title." 29
U.S.C. § 158. "[C]ontracts . . . stipulat[ing] . .
. the renunciation by the employees of rights guaranteed by
the [NLRA]" are "a continuing means of thwarting
the policy of the Act." Nat'l Licorice Co. v.
NLRB, 309 U.S. 350, 361 (1940). Contractual provisions
that "illegal[ly] restrain" employees' rights
under the NLRA are unenforceable. Id. at 360, 365.
determine whether AEI's arbitration provision is
enforceable under these federal statutes. Whether federal law
permits employers to require individual arbitration of
employees' employment-related claims is a question of
first impression in this circuit; however, at least four
other circuits have recently considered this question.
See Morris v. Ernst & Young, LLP, 834 F.3d 975,
985-86 (9th Cir. 2016) (holding arbitration provisions
mandating individual arbitration of employment-related claims
violate the NLRA and fall within the FAA's saving
clause); Lewis v. Epic Sys. Corp., 823 F.3d 1147,
1160 (7th Cir. 2016) (same); Murphy Oil USA, Inc. v.
NLRB, 808 F.3d 1013, 1018 (5th Cir. 2015) (upholding its
earlier holding in D.R. Horton, Inc. v. NLRB, 737
F.3d 344 (5th Cir. 2013), that arbitration provisions
mandating individual arbitration of employment-related claims
do not violate the NLRA and are enforceable under the FAA);
Cellular Sales of Mo., LLC v. NLRB, 824 F.3d 772,
776 (8th Cir. 2016) (upholding its earlier holding in
Owen v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir.
2013), that arbitration provisions mandating individual
arbitration of employment-related claims do not violate the
NLRA). The California Supreme Court also recently
considered this question. See Iskanian v. CLS Transp. Los
Angeles, LLC, 327 P.3d 129, 141-43 (Cal. 2014) (holding
that arbitration provisions banning class-action litigation
or collective arbitration of employment-related claims are
enforceable under the NLRA and the FAA's saving clause,
but also holding that arbitration provisions banning
representative claims under California's Private
Attorneys General Act violates that Act). There were
dissenting opinions in three of these cases. See
Morris, 834 F.3d at 990 (Ikuta, J., dissenting);
D.R. Horton, 737 F.3d at 364 (Graves, J., dissenting
in part); Iskanian, 327 P.3d at 159 (Werdegar, J.,
dissenting in part). Although this question is one of first
impression in this circuit, there is already a robust debate
about the enforceability of arbitration provisions like the
one at issue in this case.
(and the Chamber of Commerce of the United States, arguing as
amicus) urge us to follow the Fifth Circuit's reasoning
in D.R. Horton, which held that a similar
arbitration provision was enforceable. See 737 F.3d
at 362. We determine that the Fifth Circuit reached the
incorrect conclusion, and we decline to follow it.
Fifth Circuit based its decision on two principles. First, it
determined that the NLRA does not "override" the
FAA. Id. at 360; cf. CompuCredit Corp. v.
Greenwood, 565 U.S. 95, 98 (2012). But by asking at the
outset whether "the policy behind the NLRA trumped the
different policy considerations in the FAA that supported
enforcement of arbitration agreements, " D.R.
Horton, 737 F.3d at 358, the Fifth Circuit started with
the wrong question. Instead of beginning by asking which
statute trumps the other, it makes more sense to start by
asking whether the statutes are compatible. "When
addressing the interactions of federal statutes, courts are
not supposed to go out looking for trouble."
Lewis, 823 F.3d at 1158. Instead, "[b]efore we
rush to decide whether one statute eclipses another, we must
stop to see if the two statutes conflict at all."
Id. at 1156 (citing Vimar Seguros y Reaseguros,
S.A. v. M/V Sky Reefer, 515 U.S. 528, 533 (1995));
see also Morton v. Mancari, 417 U.S. 535, 551 (1974)
("The courts are not at liberty to pick and choose among
congressional enactments, and when two statutes are capable
of co-existence, it is the duty of the courts, absent a
clearly expressed congressional intention to the contrary, to
regard each as effective.").
with the right question reveals that there is no need to ask
whether the NLRA trumps the FAA. The two statutes do not
conflict. The NLRA and FAA are compatible because the
FAA's saving clause addresses precisely the scenario
before us. The NLRA prohibits the arbitration provision on
grounds that would apply to any contractual provision, and
thus triggers the FAA's saving clause. Because of the
FAA's saving clause, the statutes work in harmony.
core right that § 7 of the NLRA protects is the right
"to engage in . . . concerted activities for the purpose
of collective bargaining or other mutual aid or
protection." 29 U.S.C. § 157. Concerted activity
includes "resort to administrative and judicial
forums." Eastex, Inc. v. NLRB, 437 U.S. 556,
565-66 (1978); see also NLRB v. City Disposal Sys.,
Inc., 465 U.S. 822, 835 (1984) ("[I]n enacting
§ 7 of the NLRA, Congress sought generally to equalize
the bargaining power of the employee with that of his
employer by allowing employees to band together . . . . There
is no indication that Congress intended to limit this
protection to situations in which . . . fellow employees
combine with one another in any particular way.");
Brady v. Nat'l Football League, 644 F.3d 661,
673 (8th Cir. 2011) ("[A] lawsuit filed in good faith by
a group of employees to achieve more favorable terms or
conditions of employment is 'concerted
activity' under § 7 of the National Labor Relations
Act."); SolarCity Corp., 363 N.L.R.B. 83, 2015
WL 9315535, at *2 (Dec. 22, 2015) ("This protection has
long been held to encompass the right of employees to join
together to improve their terms and conditions of employment
through litigation. Accordingly, an employer violates Section