Quality Dining, Inc. and Grayling Corporation (collectively "Quality Dining")

National Labor Relations Board - Board Decisions

May 29, 2019

367 NLRB No. 143 (N.L.R.B. 2019)

367 NLRB No. 143
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.
Quality Dining, Inc. and Ryan Rutherford. Case
04−CA−175450
May 29, 2019
DECISION AND ORDER
BY CHAIRMAN RING AND MEMBERS MCFERRAN
AND KAPLAN
On December 15, 2016, Administrative Law Judge
Raymond P. Green issued a decision in this case. The
Respondent filed exceptions and a supporting brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.1
The judge found, applying the Board’s decision in
Murphy Oil USA, Inc., 361 NLRB 774 (2014), enf. de-
nied in relevant part 808 F.3d 1013 (5th Cir. 2015), that
the Respondent violated Section 8(a)(1) of the National
Labor Relations Act by maintaining and enforcing an
arbitration agreement that requires employees, as a con-
dition of employment, to waive their rights to pursue
class or collective actions involving employment-related
claims in all forums, whether arbitral or judicial.
Recently, the Supreme Court issued a decision in Epic
Systems Corp. v. Lewis, 584 U.S. ___, 138 S. Ct. 1612
(2018), a consolidated proceeding including review of
court decisions below in Lewis v. Epic Systems Corp.,
823 F.3d 1147 (7th Cir. 2016), Morris v. Ernst & Young,
LLP, 834 F.3d 975 (9th Cir. 2016), and Murphy Oil USA,
Inc. v. NLRB, 808 F.3d 1013 (5th Cir. 2015). Epic Sys-
tems concerned the issue, common to all three cases,
whether employer-employee agreements that contain
class- and collective-action waivers and stipulate that
employment disputes are to be resolved by individual-
ized arbitration violate the National Labor Relations Act.
Id. at ___, 138 S. Ct. at 1619−1621, 1632. The Supreme
Court held that such employment agreements do not vio-
late this Act and that the agreements must be enforced as
written pursuant to the Federal Arbitration Act. Id. at
___, 138 S. Ct. at 1619, 1632.
The Board has considered the decision and the record
in light of the exceptions and briefs. In light of the Su-
preme Court’s decision in Epic Systems, which overrules
the Board’s holding in Murphy Oil USA, Inc., we con-
clude that the complaint allegation that the arbitration
agreement is unlawful based on Murphy Oil must be
dismissed.

1 Member Emanuel is recused and took no part in the consideration
of this case.
ORDER
The complaint is dismissed.
Dated, Washington, D.C. May 29, 2019
______________________________________
John F. Ring, Chairman
______________________________________
Lauren McFerran, Member
______________________________________
Marvin E. Kaplan, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
David G. Rodriguez, Esq., for the General Counsel.
Matthew Hank, Esq., counsel for the Respondent.
R. Andrew Santillo, Esq., counsel for the Charging Party.
DECISION
STATEMENT OF THE CASE
RAYMOND P. GREEN, Administrative Law Judge. The charge
and amended charges were filed on May 3, June 9, and July 20
and 26, 2016. The initial complaint was issued on July 29,
2016, and an amended complaint was issued on October 17,
2016. In substance the complaint alleged that (a) the Respond-
ent has maintained an arbitration agreement and dispute resolu-
tion program that requires employees to waive their right to
seek collective legal action regarding employment issues and
claims and (b) has threatened to discharge employees who did
not sign the revised arbitration agreement.
On, October 20, the parties filed a joint motion to submit the
case on a stipulation of facts.
Upon consideration of the stipulated record and the briefs
filed, I make the following
FINDINGS OF FACT
I. JURISDICTION
Based on the stipulated facts, the Respondent admitted and I
find that it is an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
The Respondent is an Indiana corporation which, through
wholly-owned subsidiaries, is engaged in the operation of over
100 franchise restaurants in New Jersey, Indiana, Ohio, Dela-
ware, Michigan, and Pennsylvania.
Between November 4, 2015, and April 25, 2016, the Re-
spondent required the employees of the restaurants, including
the Charging Party, to sign an arbitration agreement as a condi-
tion of employment. The arbitration agreement reads in perti-
nent part:
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
Employee and the Company mutually agree that any and all
claims or disputes described in paragraph 2 that Employee
may have now or in the future with or against the Company
may be heard by a neutral mediator and that if voluntary me-
diation is unsuccessful, or if the Employee or the Company do
not wish to use the voluntary mediation procedure, the claim
or dispute shall be submitted to arbitration.
The disputes and claims covered by this Agreement include
all claims or controversies, whether or not arising out of em-
ployment or termination of employment and claims for viola-
tion of any federal, state, local, or other governmental law,
statute, regulation, or ordinance including without limitation
any law related to discrimination, terms and conditions of
employment, or termination of employment whether now ex-
isting or subsequently enacted.
Only one employee may be a party to any particular arbitra-
tion unless otherwise agreed by the parties. Each arbitration is
limited to the claims of the Employee who is a party to that
arbitration and shall not include claims pertaining to any other
Employee unless otherwise agreed by the parties.
Since on or before November 4, 2015, the Respondent has
maintained and enforced as a dispute resolution program. This
program contains the following provisions:
I understand if I am employed by Quality Dining, I will be re-
quired to sign an Arbitration Agreement which provides that I
cannot file a lawsuit against the Company for anything con-
nected with my employment, and that any such claims will be
heard by an arbitrator and not by a judge in court.
Only one Employee may be a party to any particular arbitra-
tion unless otherwise agreed by the parties. Each arbitration is
limited to the claims of the Employee who is a party to that
arbitration and shall not include claims pertaining to any other
Employee unless otherwise agreed by the parties.
Since about April 25, 2016, the Respondent began requiring
employees of the restaurants as a condition of employment, to
sign a revised arbitration agreement. This contains the follow-
ing provisions:
CLASS AND COLLECTIVE ACTION WAIVERS
a. EMPLOYER AND I WAIVE ANY RIGHT FOR ANY
DISPUTE TO BE BROUGHT, HEARD, DECIDED OR
ARBITRATED AS A CLASS ACTION and the Arbitrator
will have no authority to hear or preside over any such claim
("Class Action Waiver"). Notwithstanding any other clause in
this Agreement, the Class Action Waiver is not severable
from this Agreement in any instance in which the dispute is
brought as a class action.
b. EMPLOYER AND I WAIVE ANY RIGHT FOR ANY
DISPUTE TO BE BROUGHT, HEARD, DECIDED OR
ARBITRATED AS A COLLECTIVE ACTION and the Ar-
bitrator will have no authority to hear or preside over any such
claim ("Collective Action Waiver"). Notwithstanding any
other clause in this Agreement, the Collective Action Waiver
is not severable from this Agreement in any instance in which
the dispute is brought as a collective action.
On April 28, 2016, the Respondent sent a memorandum to
the employees of the Restaurants. This memorandum contained
the following statements:
Please take the time to read this Arbitration Agreement. En-
tering this version of the Arbitration Agreement is a condition
of employment. IT APPLIES TO YOU. Going forward, the
Arbitration Agreement will govern all covered legal disputes
between you and the Company.
Please sign and return the Arbitration Agreement to your
Store manager by May 1, 2016. If you have any questions re-
garding the Arbitration Agreement, please contact your Hu-
man Resources Manager, Trish Norvell at 574-243-6216.
On April 28, 2016, Grayling Corporation’s Whitehall, Penn-
sylvania restaurant sent a broadcast text message to its employ-
ees. This message stated:
Corporate will not allow you to work past Thursday 5/5/16 if
you do not hand in your arbitration agreement. Please get the
back to management ASAP.
I should note here that the arbitration agreements do contain
a proviso that permits employees to file charges with adminis-
trative agencies including the National Labor Relations Board.
On March 22, 2016, the Charging Party and employee
Stephanie Joseph filed a class-action lawsuit on behalf of them-
selves and similarly situated employees in the Pennsylvania
Court of Common Pleas, alleging, inter alia, that the Respond-
ent violated the Pennsylvania Minimum Sage Act.
On April 22, 2016, the aforesaid lawsuit was removed to the
United States District Court for the Eastern District of Pennsyl-
vania.
On April 26, 2016, the Plaintiffs amended the lawsuit to add
an allegation that the Respondent violated the Fair Labor
Standards Act of 1938.
On May 4, 2016, the Respondent filed a motion to dismiss
the aforesaid lawsuit and requested the Court to enforce the
Arbitration Agreement against the Plaintiffs.
ANALYSIS
This is yet another case involving an employer’s implemen-
tation of a policy requiring employees to enter into agreements
that waive their right to utilize any legal process, other than
arbitration, to enforce their collective interests in relation to
wages, hours, and terms and conditions of employment.1
Notwithstanding a variety of decisions by some circuit
courts, until the Supreme Court makes a definitive ruling on

1 In view of the large number of NLRB cases that have dealt with
this issue over the past few years, it seems that these types of policies
and agreements have become common, even ubiquitous among compa-
nies of sufficient size to have a human resource manager or department.
In this regard, I think that it would fair to assume that the number of
cases reaching the Board by way of unfair labor practice charges repre-
sents only the tip of the iceberg. Accordingly, it may be increasingly
difficult for a prospective employee to turn down a job where this type
of agreement is required as a condition of employment inasmuch as the
next employer to whom he or she applies will likely have the same
requirement.
QUALITY DINING, INC. 3
this issue, I am bound to follow the Board’s current precedent.
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., Oct. 26, 2015). In Murphy Oil and subsequent
cases, the Board has consistently held that requiring employees
to execute arbitration agreements containing class action waiv-
ers is a violation of Section 8(a)(1) of the Act.
The Respondent’s dispute resolution policy has been main-
tained and enforced within the 6-month period prior to the fil-
ing of the charge in this case. By the same token, the Respond-
ent has required employees to execute the arbitration agree-
ments during that same period of time. Accordingly, despite the
fact that the policy and the arbitration agreements were created
outside the statute of limitations period, this matter is not pre-
cluded by Section 10(b) of the Act. In this respect, the Board
has consistently held that an agreement entered into outside the
10(b) period may be found to be unlawful if the provisions are
unlawful and are being enforced within the 10(b) period. Con-
trol Services, 305 NLRB 435 fn. 2 (1991), enfd. 961 F.2d 1569
(3d Cir. 1992); Teamsters Local 293 (R.L. Lipton Distributing),
311 NLRB 538, 539 (1993); and Whiting Milk Corp., 145
NLRB 1035, 1037–1038 (1964).
The assertion by the Respondent that its policy and mandato-
ry arbitration agreements are not prohibited because of a sav-
ings clause is also without merit. In SolarCity Corp., 363
NLRB No. 83, slip op. at page 6 (2015), the Board stated:
It would be unclear to the reader (especially to a reader with-
out specialized legal knowledge) whether and to what extent
the subsequent language creating an exception for filing
charges with Federal agencies modifies the previous broad
prohibition on pursuing any form of collective or representa-
tive activity… This ambiguity would lead a reasonable em-
ployee to wonder whether he may file an unfair labor practice
charge, particularly when the charge is filed with or on behalf
of other employees, and thus serves as another reason to af-
firm the judge’s finding that the Agreements unlawfully pro-
hibit filing charges with the Board.2
Finally, in its communication to employees dated April 28,
2016, the Respondent essentially threatened to discharge any of
its employees who refused to sign and hand in the arbitration
agreements. I therefore conclude that by doing so the Respond-
ent threatened employees with discharge in violation of Section
8(a)(1) of the Act
REMEDY
As I have concluded that the Respondent has unlawfully
maintained a 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 its policy
and agreements made pursuant to that policy do not constitute a
waiver in all forums of their rights to maintain class or collec-
tive 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

2 See also Lincoln Eastern Management Corp., 364 NLRB No. 16,
slip op. at 3 fn. 2 (2016).
or revised policy.
Because the Respondent’s dispute resolution program and
arbitration agreements have been and continues to be main-
tained on a multistate basis, it is recommended that the Re-
spondent be ordered to post the attached Notice at all locations
where the program has been or is still in effect.
Although the United States District Court for the Eastern
District of Pennsylvania had not, at the time of this stipulation
made a decision, it is recommended that the Respondent be
required to file a motion with the court requesting the with-
drawal of its motion to dismiss the Charging Party’s lawsuit
and to enforce the arbitration agreements.
To the extent that the Charging Party has incurred litigation
expenses relating to the Respondent’s petition to compel arbi-
tration in conformance with an arbitration agreement, it is rec-
ommended that the Respondent reimburse Ryan Rutherford,
Stephanie Joseph, and any other employees who participated in
the class action lawsuit, for such expenses with interest as de-
termined in Kentucky River Medical Center, 356 NLRB8
(2010), enf. denied on other grounds, sub. nom. Jackson Hospi-
tal Corp. v. NLRB, 647 F.3d 1137 (DC Cir. 2011).
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended3
ORDER
The Respondent, Quality Dining Inc., its officers, agents, and
representatives, shall
1. Cease and desist from
(a) Maintaining and/or enforcing a policy that compels em-
ployees, as a condition of employment, to waive the right to
maintain class or collective actions in all forums, whether arbi-
tral or judicial
(b) Requiring employees to sign binding arbitration agree-
ments that prohibit collective and class litigation.
(c) Threatening employees with discharge unless they signed
binding arbitration agreements that prohibit collective and class
actions.
(d) 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.
(a) Rescind or revise the mandatory arbitration policy, or re-
vise it to make clear to employees that the policy does not con-
stitute a waiver of their right to maintain employment-related
joint, class, or collective actions in all forums or that requires
employees 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

3 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.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4
policy
(c) Withdraw any pending motions in the United States Dis-
trict Court for the Eastern District of Pennsylvania in which the
Respondent seeks enforcement of the arbitration policy’s un-
lawful restriction on class or collective claims; or if such mo-
tions have already been granted, move the appropriate court to
vacate any orders for individual arbitration and reimburse em-
ployees for any litigation expenses including attorney’s fees,
directly related to opposing Respondent’s motions to compel
individual arbitration.
(d) In the manner set forth in this decision, reimburse Ryan
Rutherford and Stephanie Joseph, and any other class partici-
pants, for any reasonable attorneys’ fees and litigation expenses
that he may have incurred in opposing the Respondent’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 prom-
ulgated, maintained or enforced copies of the attached notice
marked “Appendix.” Copies of the notice, on forms provided
by the Regional Director for Region 4 after being signed by the
Respondent’s authorized representative, shall be posted by the
Respondent and maintained for 60 consecutive days in con-
spicuous 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 electronically,
such as by email, posting on an intranet or internet site, and/or
other electronic means, if the Respondent customarily com-
municates with its employees by such means. Reasonable steps
shall be taken by the Respondent to ensure that the notices are
not altered, defaced, or covered by any other material. In addi-
tion, 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 proceedings, the Re-
spondent has gone out of business or closed the facility in-
volved in these proceedings, the Respondent shall duplicate and
mail, at its own expense, a copy of the notice to all current em-
ployees and former employees employed by the Respondent at
any time since December 3, 2015.
(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. December 15, 2016
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
violated 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 an arbitration policy or any
agreements made with employees pursuant to that policy that
waives the right of employees to maintain class or collective
action in any forum.
WE WILL NOT pursuant to the terms of such agreements seek
to enforce them by filing motions in court to dismiss 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 threaten employees with discharge if they re-
fuse to sign binding arbitration agreements.
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 Ryan Rutherford and Stephanie Joseph,
and any other class action participants, for any reasonable liti-
gation expenses including attorney’s fees, directly related to
opposing our motion to dismiss a Fair Labor Standards Act
lawsuit and to compel individual arbitration.
QUALITY DINING, INC.
The Administrative Law Judge’s decision can be found at
www.nlrb.gov/case/04-CA-175450 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.