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Cowabunga, Inc. v. National Labor Relations Board

United States Court of Appeals, Eleventh Circuit

June 26, 2018

COWABUNGA, INC., Petitioner-Cross Respondent,
v.
NATIONAL LABOR RELATIONS BOARD, Respondent-Cross Petitioner.

          Petitions for Review of a Decision of the National Labor Relations Board Agency No. 10-CA-151454

          Before MARTIN and HULL, Circuit Judges, and RESTANI, [*] Judge.

          HULL, Circuit Judge:

          In 2016, a three-member panel of the National Labor Relations Board ("NLRB") concluded that Cowabunga, Inc. ("Cowabunga") violated the National Labor Relations Act by maintaining and enforcing an employment agreement that (1) required its employees to individually arbitrate employment-related claims and waived its employees' rights to file class or collective action lawsuits against Cowabunga and (2) caused Cowabunga employees to reasonably believe that they were prohibited from filing unfair labor charges with the NLRB. Cowabunga petitioned this Court to review the NLRB panel's order, and the NLRB filed an application for enforcement of the NLRB panel's order.

         After careful review, and with the benefit of oral argument, we (1) deny the NLRB's cross-application for enforcement, (2) grant Cowabunga's petition for review, and (3) reverse in part and remand in part the NLRB panel's order as set forth in this opinion.

         I. BACKGROUND

         A. Collective Action

         From April 2014 until October 2014, Chadwick Hines worked as a pizza delivery driver for Cowabunga in Savannah, Georgia. On March 23, 2015, Hines filed a collective action under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201, et seq., against Cowabunga. Hines alleged that Cowabunga violated the FLSA by under-reimbursing him for automobile expenses he incurred when making pizza deliveries, which caused his net pay to fall below the federal minimum wage. Hines filed his collective action on behalf of himself and similarly situated pizza delivery drivers employed by Cowabunga.

         On April 30, 2015, Cowabunga filed a motion to dismiss Hines' complaint, or in the alternative, to stay and compel arbitration. In support of its motion to compel, Cowabunga attached a copy of Hines' employment agreements with Cowabunga (the "Agreement").[1] In the Agreement, Cowabunga and Hines agreed to resolve any "covered claim"-defined as including any claims arising from Cowabunga's compensation practice or any wage and payment claims arising under the FLSA[2]-exclusively through individualized arbitration rather than court litigation, as follows:

We each hereby voluntarily promise, agree, and consent to resolve any claim covered by this Agreement through binding arbitration, rather than through court litigation. We further agree that such binding arbitration pursuant to this Agreement shall be the sole and exclusive remedy for resolving any such covered claims or disputes.

         In addition, in the Agreement Hines waived his right to bring a covered claim against Cowabunga in a collective action lawsuit, as follows:

No covered claims may be asserted as part of a multi-plaintiff class or collective action. Moreover, no covered claims may proceed to arbitration on a multi-plaintiff, class or collective basis. Rather, each allegedly-aggrieved employee must proceed to arbitration separately and individually, and the Employee's arbitration proceedings shall encompass only the covered claims purportedly possessed by such individual Employee.

         On May 5, 2015, Hines dismissed his FLSA lawsuit without prejudice.[3]

         B. ยง 8(a)(1) ...


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