Private National Mortgage Acceptance Company LLC ("Pennymac")

National Labor Relations Board - Board Decisions

Dec 9, 2019

368 N.L.R.B. 126 (N.L.R.B. 2019)

368 NLRB No. 126
NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
be included in the bound volumes.
Private National Mortgage Acceptance Company
LLC (“PennyMac”) and Richard Smigelski.
Case 20–CA–170020
December 9, 2019
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN RING AND MEMBERS KAPLAN
AND EMANUEL
On November 29, 2016, Administrative Law Judge
Raymond P. Green issued the attached decision. The
Respondent filed exceptions and a supporting brief, the
General Counsel filed an answering brief, and the Re-
spondent filed a reply brief. In addition, the General
Counsel filed cross-exceptions and a supporting brief, the
Respondent filed an answering brief, and the General
Counsel filed a reply brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions only
to the extent consistent with this Supplemental Decision
and Order.
The judge found, among other things, that the Re-
spondent violated Section 8(a)(1) of the Act by maintain-
ing an arbitration agreement that employees would rea-
sonably believe precluded them from filing charges with
the National Labor Relations Board. As explained be-
low, we reverse this finding.
Since 2008, the Respondent has maintained and en-
forced a companywide Mutual Arbitration Policy
(MAP). The MAP states, in relevant part:
Private National Mortgage Acceptance Company, LLC
and its subsidiaries (“PennyMac”) have adopted and
implemented a new arbitration policy, requiring man-
datory, binding arbitration of disputes, for all employ-
ees, regardless of length of services. This memorandum
explains the procedures, as well as how the Arbitration
Policy and related rules work as a whole. Please take
the time to read this material. It applies to you. It will
govern all existing or future disputes between you and
PennyMac that are related in any way to your employ-
ment.
…
The MAP applies to PennyMac employees, regardless
of length of service or status, and covers all disputes re-
lating to or arising out of an employee’s employment
with PennyMac or the termination of that employment.
Examples of the type of disputes or claims covered by
the MAP include, but are not limited to, claims against
employees for fraud, conversion, misappropriation of
trade secrets, or claims by employees for wrongful ter-
mination of employment, breach of contract, fraud,
employment discrimination, harassment or retaliation
under the Americans With Disabilities Act, the Age
Discrimination in Employment Act, Title VII of the
Civil Rights Act of 1964 and its amendments, the Cali-
fornia Fair Employment and Housing Act or any other
state or local antidiscrimination laws, tort claims, wage
or overtime claims or other claims under the Labor
Code, or any other legal or equitable claims and causes
or action recognized by local, state or federal law or
regulations. The MAP does not cover workers’ com-
pensation claims, unemployment insurance claims or
any claims that could be made to the National Labor
Relations Board.
(Emphasis added.) The MAP also provides that both the
employee and PennyMac “forego any right either may have
to a jury trial” on covered claims, and both “waive any right
to join or consolidate claims in arbitration with others or to
make claims in arbitration as a representative or as a mem-
ber of a class or in a private attorney general capacity, un-
less such procedures are agreed to by both” the employee
and PennyMac.
The Respondent also requires its employees to sign an
Employee Agreement to Arbitrate (EAA), which states,
in relevant part:
I acknowledge that I have received and reviewed a
copy of Private National Mortgage Acceptance Com-
pany, LLC’s Mutual Arbitration Policy (“MAP”) and
the American Arbitration Association (“AAA”), and I
understand that it is a condition of my employment. I
agree that it is my obligation to make use of the MAP
and to submit to final and binding arbitration any and
all claims and disputes that are related in any way to
my employment or the termination of my employment
with Private National Mortgage Acceptance Company,
LLC, except those permitted by the MAP.
(Emphasis added.)
On May 10, 2016, the General Counsel issued a com-
plaint alleging that the Respondent violated Section
8(a)(1) by maintaining the MAP and EAA, which re-
quired employees to “waive their right to resolution of
employment-related disputes by collective or class ac-
tion,” and by attempting to enforce these agreements in
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
Sacramento County Superior Court on February 12,
2016. The General Counsel amended the complaint on
July 14, 2016, to add an allegation that the Respondent
violated Section 8(a)(1) by attempting to enforce the
MAP in Sacramento County Superior Court on March
25, 2016.
On July 27, 2016, the General Counsel and the Re-
spondent submitted this case to the judge on a stipulated
record. Their joint stipulation stated that this case pre-
sented the following two issues:
1. Whether Respondent violated Section 8(a)(1) of the
Act by implementing and maintaining the MAP, a
company-wide arbitration policy that applies to most
employment-related disputes, because the MAP re-
quires employees, as a “mandatory condition of em-
ployment,” to “forego and waive any right to join or
consolidate claims in arbitration with others or to make
claims in arbitration as a representative or as a member
of a class or in a private attorney general capacity, un-
less such procedures are agreed to by both [the em-
ployee] and PennyMac.”
2. Whether Respondent violated Section 8(a)(1) of the
Act by seeking to compel Charging Party to submit his
claims alleged in Smigelski v. PennyMac Financial
Services Inc., Sacramento Superior Court Case No. 34-
2015-00186855, to arbitration in accordance with the
MAP.
Thereafter, on August 15, 2016, the General Counsel filed a
motion seeking to further amend the complaint to allege that
the implementation and maintenance of the MAP and EAA
are unlawful on an additional basis: that a reasonable em-
ployee would read them as precluding him or her from fil-
ing an unfair labor practice charge with the Board. The
Respondent filed an opposition to the motion, arguing that
the General Counsel cannot add a new issue to the case fol-
lowing the submission of the joint stipulation. In support,
the Respondent noted that the General Counsel rejected the
Respondent’s offer to withdraw the joint stipulation and
jointly submit a new stipulation incorporating the new alle-
gation.
On August 29, 2016, Administrative Law Judge Dickie
Montemayor issued an order granting the General Coun-
sel’s motion. The parties did not thereafter seek to
amend the joint stipulation.
On November 29, 2016, Administrative Law Judge
Raymond P. Green issued a decision on the merits of the
case. Relying on Murphy Oil USA, Inc., 361 NLRB 774
(2014), enf. denied in relevant part 808 F.3d 1013 (5th
Cir. 2015), the judge found that the Respondent violated
Section 8(a)(1) by maintaining the MAP because the
agreements required employees to waive their right to
pursue class or collective actions in all forums. He also
found that employees would reasonably read the MAP as
barring or restricting them from filing charges with the
Board, but he did not reference this additional finding in
his conclusions of law, remedy, recommended Order, or
notice to employees.
On November 16, 2018, the Board issued a Decision,
Order, and Notice to Show Cause in this case. The
Board dismissed the allegations that the Respondent un-
lawfully maintained and attempted to enforce the MAP
in light of the Supreme Court’s decision in Epic Systems
Corp. v. Lewis, 584 U.S. __, 138 S. Ct. 1612 (2018), in
which the Court held that employer-employee agree-
ments that contain class- and collective-action waivers
and require individualized arbitration do not violate Sec-
tion 8(a)(1) of the Act and should be enforced as written
pursuant to the Federal Arbitration Act (FAA). The
Board also gave notice to the parties to show cause why
the remaining issue in the case—whether the Respond-
ent’s mandatory arbitration agreements unlawfully re-
strict employee access to the Board—should not be re-
manded to the judge for further proceedings in light of
the Board’s decision in Boeing Co., 365 NLRB No. 154
(2017).1 The Respondent and the General Counsel each
filed a response to the Notice to Show Cause. Neither
requested that this case be remanded to the judge, and
each provided further arguments on the merits of the
remaining allegations. In view of the parties’ responses,
and since the remaining allegations may be decided
based on the existing record, we find that a remand is
unnecessary.
On exception, the General Counsel contends that the
judge correctly found the MAP and EAA unlawful on the
basis that employees would reasonably conclude that
they were prohibited from filing charges with the Board,
but he inadvertently failed to include this finding in his
conclusions of law, remedy, recommended Order, and
notice. The Respondent contends that the judge erred in
finding the violation but adds that, in any event, his
omission of the finding from the conclusions of law,

1 In Boeing, the Board overruled the “reasonably construe” prong of
Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004), and an-
nounced a new standard, which applies retroactively, for evaluating the
lawfulness of a facially neutral policy. 365 NLRB No. 154, slip op. at
3. Under Boeing, the Board first determines whether a challenged rule
or policy, when reasonably interpreted, would potentially interfere with
the exercise of rights under Sec. 7 of the Act. If not, the rule or policy
is lawful. If so, the Board evaluates two things: “(i) the nature and
extent of the potential impact on NLRA rights, and (ii) legitimate justi-
fications associated with the rule.” Id. The Boeing standard replaced
the “reasonably construe” prong of Lutheran Heritage. Other aspects
of Lutheran Heritage remain intact, including whether a challenged
rule or policy explicitly restricts activities protected by Sec. 7. 343
NLRB at 646.
PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY LLC 3
remedy, recommended Order, and notice was not inad-
vertent. Rather, the Respondent contends, the omission
was deliberate and in recognition of the fact that the Re-
spondent’s due process rights would be violated by its
inclusion.
Contrary to the judge and the General Counsel, we
find that consideration of this allegation on the merits is
precluded by the parties’ stipulation, and therefore the
allegation must be dismissed.
“The Board has long held that a stipulation is conclu-
sive on the party making it and prohibits any further dis-
pute as to the stipulated matters.” Labor Ready South-
west, 363 NLRB No. 138, slip op. at 1 fn. 1 (2016) (cit-
ing Woodland Clinic, 331 NLRB 735, 741 (2000)). The
Board adheres strictly to the parties’ stipulation, “due, at
least in part, to the parties’ choice to forgo offering evi-
dence at the hearing in favor of reliance on the stipula-
tion.” Arbors at New Castle, 347 NLRB 544, 545
(2006).
In Labor Ready Southwest, the Board found that the
administrative law judge correctly declined to consider a
complaint allegation not included among the stipulated
issues presented for resolution. In support, the Board
noted that the General Counsel stipulated to the issues
presented, the stipulation did not include the additional
complaint allegation, and the Respondent could reasona-
bly rely on that stipulation in deciding not to submit evi-
dence relevant to the additional allegation. 363 NLRB
No. 138, slip op. at 1 fn. 1. Here, as in Labor Ready
Southwest, the parties’ stipulation did not include one of
the allegations in the amended complaint—specifically,
the allegation concerning the MAP’s restriction of em-
ployee access to the Board. Indeed, the General Counsel
rejected the Respondent’s offer to withdraw the joint
stipulation and jointly submit a new stipulation incorpo-
rating the new allegation. In the absence of a stipulated
issue addressing this allegation, the issue was not pre-
sented for decision, and the judge erred in reaching the
merits of this allegation.
In addition, even if the issue had been properly raised
to the judge, we would dismiss the allegation. As noted
above, the MAP includes language explicitly excluding
from its coverage “any claims that could be made to the
National Labor Relations Board.” This exclusion clause
precludes a finding that the MAP reasonably interferes
with employees’ right to file charges with the Board.
In Prime Healthcare Paradise Valley, LLC, the Board
held that “an arbitration agreement that explicitly prohib-
its the filing of claims with the Board or, more generally,
with administrative agencies must be found unlawful”
because “[s]uch an agreement constitutes an explicit pro-
hibition on the exercise of employee rights under the
Act.” 368 NLRB No. 10, slip op. at 5 (2019). The
Board further stated that where an agreement does not
explicitly prohibit the filing of claims with the Board, the
Board will apply the standard set forth in Boeing and
initially “determine whether that agreement, ‘when rea-
sonably interpreted, would potentially interfere with the
exercise of NLRA rights.’” Id. (quoting Boeing, above,
slip op. at 3). “The ‘when reasonably interpreted’ stand-
ard is objective and looks solely to the wording of the
rule, policy, or other provision at issue[,] . . . interpreted
from the employees’ perspective.” 368 NLRB No. 10,
slip op. at 6 fn. 14.
Here, the MAP’s exclusion clause carves out from the
scope of the agreement “any claims” that could be made
to the Board.2 When interpreted from the perspective of
objective, reasonable employees, this clause would as-
sure them that the MAP does not require them to arbi-
trate claims that could be made to the Board. Thus,
when reasonably interpreted, the MAP does not poten-
tially interfere with employees’ exercise of their right to
access the Board or its processes.
As the MAP includes an effective exclusion clause, we
would place it—assuming the issue were properly before
us—in Boeing Category 1(a). Boeing, above, slip op. at
4 (Category 1(a) consists of “rules that are lawful be-
cause, when reasonably interpreted, they would have no
tendency to interfere with Section 7 rights and therefore
no balancing of rights and justifications is warranted”)
(footnote omitted). We similarly would find the EAA
lawful, as it clearly incorporates the MAP’s exclusion
clause: “I agree that it is my obligation to make use of
the MAP and to submit to final and binding arbitration
any and all claims and disputes that are related in any
way to my employment or the termination of my em-
ployment with Private National Mortgage Acceptance
Company, LLC, except those permitted by the MAP”
(emphasis added).
In sum, because the issue was not presented in the par-
ties’ joint stipulation, the judge erred in reaching the
merits of the allegation that employees would reasonably
believe that the Respondent’s MAP and EAA prohibited
them from filing charges with the Board. Moreover,
even if the issue had been presented in the joint stipula-
tion, neither the MAP nor the EAA interferes with em-
ployees’ access to the Board and its processes. Accord-

2 An exclusion clause in an arbitration agreement carves out or ex-
cludes certain claims or types of claims from the scope of the agree-
ment. In contrast, a savings clause in an arbitration agreement provides
that employees retain the right to file charges with the Board, even if
the agreement otherwise includes claims arising under the Act within
its scope. See Briad Wenco, LLC d/b/a Wendy’s Restaurant, 368
NLRB No. 72 (2019).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4
ingly, we shall dismiss the remaining complaint allega-
tion.
ORDER
The complaint is dismissed.
Dated, Washington, D.C. December 9, 2019
______________________________________
John F. Ring, Chairman
______________________________________
Marvin E. Kaplan, Member
________________________________________
William J. Emanuel Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
Min-Kuk Song, Esq., for the General Counsel.
Richard S. Zuniga, Esq., counsel for the Respondent.
Chris Baker, Esq., counsel for the Charging Party.
DECISION
RAYMOND P. GREEN, Administrative Law Judge. This case
was presented to me by way of a stipulated record. The charge
was filed on February 18, 2016, and served upon the Respond-
ent on February 19, 2016. The Complaint was issued on May
10, 2016, and was thereafter amended on July 14 and August
15, 2016. In substance, the complaint as amended alleges (a)
that the Respondent violated Section 8(a)(1) by implementing
and maintaining a company-wide arbitration policy applicable
to most employment-related disputes and which requires em-
ployees as a condition of employment to waive any right to join
or consolidate claims in arbitration with others or to make
claims as a representative or member of a class or in a private
attorney general capacity, unless such procedures are agreed to
by to both the company and the employee; and (b) that the Re-
spondent violated Section 8(a)(1) by seeking to compel the
Charging Party to submit his claims alleged in Smigelski v.
PennyMac Financial Services Inc. to arbitration.
FINDINGS AND CONCLUSIONS
I. JURISDICTION
The Respondent admits and I find that it is an employer en-
gaged in commerce within the meaning of Section 2(2), (6),
and (7) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICE
The stipulated facts are as follows:
1. The Respondent originates and services residential mort-
gage loans in 49 states, including California and the District of
Columbia. Since 2008, the Respondent has maintained and
enforced a company-wide Mutual Arbitration Policy, (referred
to as MAP), that requires mandatory, binding arbitration of
disputes for all employees as a mandatory condition of em-
ployment. MAP covers all disputes relating to or arising out of
an employee’s employment and requires employees to forego
and waive any right to join or consolidate a claim with others or
to make claims as a representative or as a member of a class.
This essentially means that the Respondent’s employees can
pursue employment related claims only by way of arbitration
and only on an individual basis. The Respondent requires eve-
ry employee to sign a document called the Employee Agree-
ment to Arbitrate, referred to herein as the EAA, pursuant to
which they acknowledge and agree to the terms of the MAP.
2. The Charging Party, Smigelski was employed by the Re-
spondent as an Account Executive from November 2014 to
April 2015. He signed the EEA on November 17, 2014, and
therefore acknowledged and agreed to the MAP.
3. The MAP states that it was adopted as a mandatory condi-
tion of employment and further states that an employee’s deci-
sion to accept employment or to continue employment with
PennyMac constitutes agreement to be bound by the MAP. The
signed EEA also states that the MAP is a condition of employ-
ment. In pertinent part the provisions of the MAP are as fol-
lows:
The MAP applies to PennyMac employees, regardless of
length of service or status and covers all disputes relating to or
arising out of an employee’s employment with PennyMac or
the termination of that employment. Examples of the types of
disputes or claims covered by the MAP include, but are not
limited to claims against employees for fraud, conversion,
Misappropriation of trade secrets, or claims by employees for
wrongful termination of employment, breach of contract,
fraud, employment discrimination, harassment or retaliation
under the American With Disabilities Act, the Age Discrimi-
nation in Employment Act, Title VII of the Civil Rights Act
of 1964 and its amendments, the California Fair Employment
and Housing Act or any other state or local anti-
discrimination laws, tort claims, wage or overtime claims or
other claims under the Labor Code or any other legal or equi-
table claims and cause or action recognized by local, state or
federal law or regulations. The MAP does not cover workers’
compensation claims, unemployment insurance claims or any
claims that could be made to the National Labor Relations
Board. The MAP also does not prohibit either PennyMac or
any PennyMac employee from filing a claim in small claims
court, as long as the claim properly is within the jurisdiction
of the small claims court. Because the MAP changes the fo-
rum in which you may pursue claims against PennyMac and
affects your legal rights, you may wish to review the MAP
with an attorney or other advisor of your choice. PennyMac
encourages you to do so.
Your decision to accept employment or to continue employ-
ment with PennyMac constitutes your agreement to be bound
by the MAP Likewise, PennyMac agrees to be bound by the
MAP. This mutual obligation to arbitrate claims means that
both you and PennyMac are bound to use the MAP as the on-
ly means of resolving any employment-related disputes. This
PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY LLC 5
mutual agreement to arbitrate claims also means that both you
and PennyMac forego any right either may have to a jury trial
on claims in any way to your employment and both you and
PennyMac forego and waive any right to join or consolidate
claims in arbitration with others or to make claims in arbitra-
tion as a representative or as a member of a class or in a pri-
vate attorney general capacity, unless such as procedures are
agreed to by both you and PennyMac. No remedies that oth-
erwise would be available to you individual or to PennyMac
in a court of law, however, will be forfeited by virtue of this
agreement to use and be bound by the MAP.
4. The MAP describes in some detail the arbitration process
and states that the employee and the Respondent will share the
cost of the American Arbitration Association’s filing fee and
the arbitrator’s fees and cost, except that the employee’s share
shall not exceed the amount equal to the local court’s civil fil-
ing fee. It also provides that except as otherwise provided by
law, the employee will be responsible for the fees and costs of
legal counsel plus other costs associated with witnesses and the
obtaining of hearing transcripts.
5. The provisions of the MAP expressly exclude claims that
might be made under the National Labor Relations Board.
However, it is also clear that in the MAP provisions there is no
description of what those types of claims might entail.
6. The parties stipulated that if called to testify, witnesses
for the Respondent would testify that the Respondent’s purpose
in implementing the MAP was to create an expedient, efficient,
more cost-effective and fair means to resolve employment-
related disputes that cannot be resolved informally.
7. On November 17, 2014, Richard Smigelski signed the
EEA wherein he acknowledged receipt of the MAP.
8. On November 17, 2015, Smigelski filed a Complaint
against the Respondent in the Sacramento Superior Court, in
case number 34-2015-00186855. This was entitled “Repre-
sentative Action Complaint for Violation of the Private Attor-
neys General Act of 2004” (Labor Code Section 2698, et. seq.).
In essence, this was an action on behalf of a class of non-
exempt employees for alleged violations of wage and overtime
laws.
9. On February 16, 2016, the Respondent filed a Petition to
Compel Arbitration and Stay Action in the aforesaid law suit
and sought to compel Smigelski to submit his claims to arbitra-
tion in accordance with the MAP.
10. On March 10, 2016, Smigelski filed a First Amended
Complaint in Smigelski v. PennyMac.
11. On March 11, 2016, the Court issued an Order denying
the Respondent’s Petition to Compel Arbitration.
12. On March 25, 2016, the Respondent filed a Petition to
Compel Arbitration and Stay Action in relation to the amended
Complaint filed in Smigelski v PennyMac.
13. On March 25, 2016, the Respondent filed a Motion for
Reconsideration regarding the Court’s denial of its previous
Petition to Compel Arbitration.
14. On April 22, 2016, the Sacramento Superior Court issued
an Order denying the Respondent’s Petition to Compel Arbitra-
tion.
15. On April 22, 2016, the Sacramento Superior Court issued
an order denying the Respondent’s Motion for Reconsideration.
III. DISCUSSION
This is another in a long line of cases involving whether (a)
an employer can require its employees to agree, as a condition
of continued employment, to utilize arbitration as an alternative
to the judicial process for resolving employment disputes; and
(b) whether an employer can require employees, as a condition
of continued employment, to waive their ability to file class
action claims. (Whether in a court or before an arbitrator).
It is the Board’s current position, despite reversals by several
Circuit Courts, that an employer will violate Section 8(a)(1) of
the Act when it requires its employees to utilize arbitration to
resolve employment disputes and when it precludes employees
from acting in concert to bring class actions, whether in court
or before an arbitrator.
In my capacity as an Administrative Law Judge of the
NLRB, I am bound to follow Board precedent irrespective of
contrary opinions by Circuit Courts, unless and until the Su-
preme Court makes a definitive ruling on the subject matter in
dispute.
Therefore, this case is controlled by the Board’s decision in
Murphy Oil USA, Inc., 361 NLRB No. 72 (2014), enf. denied
808 F.3d 1013 (5th Cir. 2015). In Murphy Oil and subsequent
cases, the Board has consistently held that requiring employees
to sign class action waivers, with or without an “opt out”
clause, is a violation of Section 8(a)(1) of the Act.
Further, in light of the manner in which the MAP provisions
are broadly drafted, I conclude that employees would have a
reasonable basis for concluding that they would be precluded
from filing charges with the National Labor Relations Board. In
the absence of some reasonable explanation to employees of
their rights under the National Labor Relations Act, the mini-
mal statement to the effect that the MAP excludes charges filed
with the Board is, in my opinion, insufficient to assure employ-
ees that their rights to file charges with the National Labor Re-
lations Board have not been adversely affected. SolarCity
Corp., 363 NLRB No. 83, slip op. at 6 (2015).
Finally, in light of current Board precedent, I must reject the
Respondent’s contention that its Motions to compel individual
arbitration were protected by the First Amendment’s Petition
Clause. The Supreme Court in Bill Johnson’s Restaurants v.
NLRB, 461 U.S. 731,731–743 (1983), noted that there were two
situations where such legal actions do not enjoy the Amend-
ment’s protection. The first is where the action is outside the
State Court’s jurisdiction because of Federal preemption. And
the second is where the action seeks to enforce a matter which
is illegal under Federal law. The Board has therefore restrained
litigation efforts that have an illegal objective of curtailing em-
ployees’ Section 7 rights. Murphy Oil, supra, slip op. at 20–21,
Convergys Corp., 363 NLRB No. 51, slip op. at fn. 5 (2015).
CONCLUSIONS OF LAW
By maintaining a provision that requires employees to (a)
waive the right to bring class actions or to act concertedly in
regard to their terms and conditions of employment; (b) waive
the right to initiate lawsuits regarding terms and conditions of
their employment; and (c) by filing Motions in Court to compel
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD6
an employee to arbitrate on an individual basis a class action
lawsuit relating to terms and conditions of employment, the
Respondent has violated Section 8(a)(1) of the Act.
REMEDY
As it concluded that the Respondent has unlawfully main-
tained an Arbitration Policy that precludes class or collective
actions by employees, I shall recommend that it be ordered to
rescind or revise that policy to make it clear to employees that
the Policy and agreements made pursuant to the Policy do not
constitute a waiver in all forums of their rights to maintain class
or collective actions relating to their wages, hours or other
terms and conditions of employment. I shall also recommend
that the Respondent be required to notify its employees of the
rescinded or revised Policy.
Because the Arbitration Policy has been and continues to be
maintained throughout the United States, it is recommended
that the Respondent be ordered to post the attached Notice at all
locations where the Policy has been or is still in effect.
To the extent that the Charging Party has incurred litigation
expenses relating to the Respondent’s Petition to compel arbi-
tration in conformance with its Arbitration Policy, it is recom-
mended that the Respondent reimburse the Charging Party for
such expenses with interest as determined in Kentucky River
Medical Center, 356 NLRB 6 (2010), enf. denied on other
grounds, sub. nom. Jackson Hospital Corp. v. NLRB, 647 F.3d
1137 (DC Cir. 2011).
Additionally, although the Sacramento Superior Court has
denied the Respondent’s Petitions and Motions to compel arbi-
tration, it is not clear to me that the matter has been finally put
to rest and that no appeal has been or will be filed. It therefore
is recommended that the Respondent be required to file Mo-
tions with the Court in Smigelski v. PennyMac, requesting the
withdrawal of its motions to compel individual arbitration.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended1
ORDER
The Respondent, Private National Mortgage Acceptance
Company LLC (“PennyMac”), its officers, agents, and repre-
sentatives, shall
1. Cease and desist from
(a) Maintaining and/or enforcing a policy that compels em-
ployees, as a condition of employment waive the right to main-
tain class or collective actions in all forums, whether arbitral or
judicial.
(b) Requiring employees to sign binding arbitration agree-
ments that prohibit collective and class litigation.
(c) In any like or related manner, interfering with, restrain-
ing, or coercing employees in the exercise of their rights under
Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.

1 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided in Sec. 102.48 of the Rules, be adopt-
ed by the Board and all objections to them shall be deemed waived for
all purposes.
(a) Rescind or revise the mandatory arbitration policy in all
of its forms, or revise it in all of its forms, to make clear to
employees that the arbitration policy does not constitute a
waiver of their right to maintain employment-related joint,
class, or collective actions in all forums or that requires em-
ployees to waive their right to maintain employment-related
class and collective claims in all forums, whether arbitral or
judicial.
(b) Notify all current and former employees who were re-
quired to sign or otherwise become bound by the mandatory
arbitration policy in any form that it has been rescinded or re-
vised and, if revised, provide them with a copy of the revised
policy.
(c) Withdraw any pending motions for individual arbitration
in which the Respondent seeks enforcement of the arbitration
policy’s unlawful restriction on class or collective claims; or if
such motions have already been granted, move the appropriate
court to vacate any orders for individual arbitration and reim-
burse employees for any litigation expenses including attor-
ney’s fees, directly related to opposing Respondent’s motions
to compel individual arbitration.
(d) In the manner set forth in this decision, reimburse Rich-
ard Smigelski for any reasonable attorneys’ fees and litigation
expenses that he may have incurred in opposing the Respond-
ent’s Motion to compel individual arbitration.
(e) Within 14 days after service by the Region, post at its lo-
cations nationwide where the Arbitration Policy has been
promulgated, maintained or enforced copies of the attached
notice marked “Appendix.” Copies of the notice, on forms
provided by the Regional Director for Region 20 after being
signed by the Respondent’s authorized representative, shall be
posted by the Respondent and maintained for 60 consecutive
days in conspicuous places including all places where notices to
employees are customarily posted. In addition to the physical
posting of paper notices, the notices shall be distributed elec-
tronically, such as by email, posting on an intranet or internet
site, and /or other electronic means, if the Respondent custom-
arily communicates with its employees by such means. Reason-
able steps shall be taken by the Respondent to ensure that the
notices are not altered, defaced, or covered by any other mate-
rial. In addition, a copy of this notice will be made available to
employees on the same basis and to the same group or class of
employees as the Arbitration Policy was made available to
them. In the event that, during the pendency of these proceed-
ings, the Respondent has gone out of business or closed the
facility involved in these proceedings, the Respondent shall
duplicate and mail, at its own expense, a copy of the notice to
all current employees and former employees employed by the
Respondent at any time since July 10, 2012.
(f) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that the
Respondent has taken to comply.
Dated, Washington, D.C. November 29, 2016
PRIVATE NATIONAL MORTGAGE ACCEPTANCE COMPANY LLC 7
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we vio-
lated Federal labor law and has ordered us to post and obey this
notice.
Section 7 of the Act gives employees these rights.
To organize
To form, join, or assist any union
To bargain collectively through representatives of their own
choice
To act together for other mutual aid or protection
To choose not to engage in any of these protected concerted
activities.
WE WILL NOT maintain or enforce the MAP policy or any
agreements made with employees pursuant to that policy that
waives the right to maintain class or collective action in any
forum.
WE WILL NOT pursuant to the terms of such agreements en-
force them by filing Motions in Court to stay collective action
lawsuits and to compel individual arbitrations.
WE WILL NOT require employees to sign binding arbitration
agreements that prohibit collective and class litigation.
WE WILL NOT in any like or related manner, interfere with,
restrain, or coerce employees in the exercise of their rights
under Section 7 of the Act.
WE WILL withdraw any pending motions in which we have
sought to enforce the arbitration policy’s unlawful restriction
on class or collective claims; or if such motions have already
been granted, move the appropriate court to vacate any orders
for individual arbitration.
WE WILL reimburse Richard Smigelski for any reasonable lit-
igation expenses, including attorney’s fees, directly related to
opposing our motions to compel individual arbitration.
PRIVATE NATIONAL MORTGAGE ACCEPTANCE
COMPANY LLC
The Administrative Law Judge’s decision can be found at
www.nlrb.gov/case/20-CA-170020 or by using the QR code
below. Alternatively, you can obtain a copy of the decision
from the Executive Secretary, National Labor Relations Board,
1015 Half Street, S.E., Washington, D.C. 20570, or by calling
(202) 273–1940.