Who is Marvin Kaplan, nominee to the NLRB?

The President officially sent Marvin Kaplan's nomination to the Senate on June 20. [White House Press Release] The White House's short bio for Mr. Kaplan is [here]. If confirmed by the Senate, the NLRB will have four members - two Republicans and two Democrats. But don't worry; the nomination of one more Republican an't be far off.

Who is Marvin Kaplan? The following information is from Mr. Kaplan's LinkedIn biography:

  • Counsel to Heather L. MacDougall, Acting Chair and Commissioner at the U.S. Occupational Safety and Health Review Commission, since September 2015.
  • Workforce Policy Counsel for the U.S. House Education and the Workforce Committee, January 2012 - September 2015. Drafted labor and employment legislation, including the Tribal Labor Sovereignty Act of 2015 and the Workforce Democracy and Fairness Act. Conducted oversight of and investigated allegations of waste, fraud, and abuse by the Department of Labor and National Labor Relations Board. Led efforts to fight DOL overtime rules and 2012 unconstitutional NLRB recess appointments. Provided legal and policy advice on all labor and employment legislation, including the Kline-Miller Multiemployer Pension Reform Act of 2014, and oversight within the committee’s jurisdiction.
  • Counsel, US House Oversight and Government Reform Committee, January 2009 - January 2011. Conducted oversight of and investigated allegations of waste, fraud, and abuse by the Department of Labor, National Labor Relations Board, and Federal employees generally.
  • Special Assistant, Department of Labor, Office of Labor-Management Standards, June 2007 - January 2009. Provided legal advice on issues related to the Administrative Procedure Act, Labor-Management Reporting and Disclosure Act, Labor Management Relations Act, National Labor Relations Act, and Employee Retirement Income Security Act. Drafted the union trust reporting notice of proposed rulemaking and final rule, and assisted in revising union reporting requirements on the Form LM-2/3.
  • Associate Attorney, McDowell Rice Smith & Buchanan, Kansas City, Missouri, February 2007 - June 2007. Drafted memos, motions, and briefs on subjects including Intellectual Property, Personal Injury, Products Liability and Contracts (Construction).
  • Juris Doctor, Washington University in St. Louis, 2003-2006.
  • Bachelor's Degree, Policy Analysis and Management, Cornell University, 2000-2003.

I'm also expecting the President to nominate William (Bill) Emanuel, a shareholder at Littler Mendelson where he practices traditional labor law in the Los Angeles office. [Emanuel's Littler bio]

I'm baffled why Kaplan got the first nod.


DOJ throws NLRB under the bus in SCOTUS class action waiver case (+ video)

Elections matter. The government has disowned the basic rule of the NLRB's 2012 D.R. Horton rule that class action waiver agreements are illegal because they deny employees the statutory right to engage in concerted activities for mutual aid and protection. We won't need to wait until the President appoints two new Board members.

2:04 minute video about the Solicitor General switching sides at the US Supreme Court in NLRB v. Murphy.

2:04 minute video about the Solicitor General switching sides at the US Supreme Court in NLRB v. Murphy.


The government's about-face was announced in an amicus brief [PDF] filed at the US Supreme Court on June 16 in Epic Systems Corp v. Lewis (consolidated with NLRB v. Murphy Oil and Ernst & Young v. Morris). [Other briefs here]

Facts: A non-union employer requires its employees to agree that they will arbitrate work-related legal claims – but not on a collective or class basis. Employees attempt to litigate or arbitrate (in a class action or collective action) claimed violations of the Fair Labor Standards Act (FLSA).

In Murphy Oil, the US Solicitor General originally filed a petition for a writ of certiorari on behalf of the NLRB, defending the Board’s position. But now, "After the change in administration, the [Solicitor's] Office reconsidered the issue and has reached the opposite conclusion."

The government now argues that the Federal Arbitration Act's policy favoring enforcement of arbitration agreements is not overridden by the "ambiguous NLRA language" that the NLRB used in finding that class action waiver agreements are illegal.

Summary of the government's arguments:

  • The FAA requires courts to enforce agreements to arbitrate federal claims unless the FAA's mandate has been overridden by a contrary congressional command or unless enforcing the parties' agreement would deprive the plaintiff of a substantive federal right.
  • The FAA's presumption in favor of enforcing arbitration agreements may yield where "Congress itself" has overridden that presumption in another statute. A statutory authorization to pursue class actions in court for violations of particular federal laws – such as the FLSA, which is involved in these case – is insufficient to override the FAA's directive that agreements to arbitrate must be enforced.
  • Plaintiffs' argument rests on the idea that the NLRA's recognition of a general right to engage in "concerted activities" confers greater rights to pursue FLSA claims collectively than does the FLSA itself. Nothing in the NLRA's legislative history indicates that Congress intended to bar enforcement of arbitration agreements like those at issue here.
  • An agreement to arbitrate does not entail any surrender of substantive statutory rights. The arbitration agreements in these cases do not purport to authorize employer conduct that would violate the FLSA's wage-and-hour provisions, and they do not prevent a successful plaintiff from recovering (through arbitration) the full relief that a court could award for an FLSA violation.
  • Enforcement of the arbitration agreements will not deprive plaintiffs of any substantive right under the NLRA. Although NLRA Section 7 confers important substantive rights to organize and to engage in collective bargaining, the arbitration agreements do not constrain plaintiffs' exercise of those rights.
  • Even if using collective dispute resolution mechanisms for FLSA claims is included within Section 7's phrase "other concerted activities," it is a procedural right under the FLSA, and not a substantive NLRA right.
  • The FAA's saving clause provides no sound basis for declining to enforce the parties' arbitration agreements. The Supreme Court in AT&T Mobility LLC v. Concepcion, 563 U.S. 333 (2011), held that a state-law rule against enforcement of class action waivers contained in certain consumer contracts fell outside the saving clause. The same result should follow in the present cases.

My views:

  • As one expects, the government's brief is nicely written. Indeed, many Supreme Court Justices might follow exactly the logic expressed in the brief.
  • As interesting as it is that the government switched horses in mid-stream, don't expect that to have any impact on the Supreme Court Justices. In a statutory interpretation case such as this one, they each do the best they can to figure out Congress' intent. They don't care much about the intent of the Justice Department.

Oral argument in these cases will be in the Fall of 2017, with a decision expected in 2018.

[For recent decisions and pending employment law cases, see Supreme Court Watch.] 

SCOTUS hands big win to employers in ERISA church plan case (+ video)

It's unanimous. ERISA's "church plan" exemption applies to a pension plan that is maintained by a church-affiliated organization even though the plan was not established by a church. Advocate Health Care Network v. Stapleton (US Supreme Court 06/05/2017) [Opinion text].

Watch the video

Watch the video


Takeaway: This means that a huge number of hospitals and health care facilities are allowed to ignore ERISA's rules, which are designed to protect employees. These institutions operate for-profit subsidiaries, employ thousands of employees, generate billions of dollars in revenues, and compete in the marketplace with companies that must bear the costs of complying with ERISA.

Original ERISA church plan exemption: ERISA § 1002(33)(A) defines a church plan as a “plan established and maintained” by a church. [Emphasis added.] 

But Congress later amended ERISA to expand the definition in §1002(33)(C)(i):

“A plan established and maintained for its employees . . . by a church . . . includes a plan maintained by an organization . . . the principal purpose . . . of which is the administration or funding of [such] plan . . . for the employees of a church . . . , if such organization is controlled by or associated with a church.”

The Supreme Court placed its focus on the word "includes." Lower courts (3rd, 7th, and 9th Circuits) had agreed with the employees' argument that §1002(33)(C)(i) merely created a sub-set of church plans, but the plans still had to have been established by a church. Reversing, the Supreme Court explained that use of the word “include” is not literal, but tells readers that a different type of plan should receive the same treatment (i.e., an exemption) as the type described in the old definition. In other words, because Congress deemed the category of plans “established and maintained by a church” to “include” plans “maintained by” church-affiliated organizations, those plans – and all those plans – are exempt from ERISA’s requirements.

In trying to make sense out of Congress' somewhat opaque language, the Court pointed out that (1) there were much more direct ways for Congress to draft language that would have the effect the employees wanted and (2) the employees' interpretation would have required that one ignore the words "established and" in subparagraph (C)(i).

And what's missing? The Court points out that three government agencies (Internal Revenue Service, Department of Labor, and Pension Benefit Guaranty Corporation) have for decades interpreted the statute as exempting plans like the ones involved in this case. Yet the Court does not breathe a single word as to whether those agencies' interpretations are entitled to one whit of deference. This is especially interesting in light of the fact that the government's amicus brief placed huge emphasis on deference-to-agency principles, and it pleaded with the Court to recognize the hospitals' reliance interest that built up over decades.

[For recent decisions and pending employment law cases, see Supreme Court Watch.]

SCOTUS: Federal Arbitration Act kills Kentucky's clear-statement rule

One more time, with gusto: A state-law rule that singles out arbitration agreements for disfavored treatment violates the Federal Arbitration Act (FAA). Kindred Nursing Centers v. Clark (US Supreme Court 05/15/2017) [opinion text].

The significant teaching in this case is a strong re-statement that the FAA requires courts to place arbitration agreements on equal footing with all other contracts at the contract-formation stage as well as the contract-enforcement stage.

Janis Clark held a broad power of attorney for her mother. When Mom moved in to a nursing home operated by Kindred Nursing Centers, Janis completed all the paperwork – including an arbitration agreement on Mom's behalf providing that any claims arising from Mom's stay at the facility would be resolved through binding arbitration. After Mom died, her estate sued claiming that Kindred's substandard care caused her death. Kindred moved to dismiss, citing the arbitration agreement, but the Kentucky courts allowed the suit to go forward. [Kentucky opinion text]

The Supreme Court of Kentucky examined the power-of-attorney instrument with considerable care, and concluded that Janis was not authorized to enter into an arbitration agreement. The court emphasized that it would enforce an arbitration agreement if one had been made, but that its decision was that there was no assent to an arbitration agreement in the first place.

The Kentucky court put things in terms of a waiver of fundamental constitutional rights – access to the courts, appeal to a higher court, and trial by jury – and said that "the power to waive generally such fundamental constitutional rights must be unambiguously expressed in the text of the power-of-attorney document."

"[W]e are convinced that the power to waive generally such fundamental constitutional rights must be unambiguously expressed in the text of the power-of-attorney document in order for that authority to be vested in the attorney-in-fact. The need for specificity is all the more important when the affected fundamental rights include the right of access to the courts (Ky. Const. § 14), the right of appeal to a higher court (Ky. Const. § 115), and the right of trial by jury, which incidentally is the only thing that our Constitution commands us to 'hold sacred.' See Ky. Const. § 7 ('The ancient mode of trial by jury shall be held sacred, and the right thereof remain inviolate, subject to such modifications as may be authorized by this Constitution.')."

In a 10-page smack-down, Justice Kagan ripped through the Kentucky court's analysis, saying, "The Kentucky Supreme Court’s clear-statement rule … fails to put arbitration agreements on an equal plane with other contracts." She avoided saying that the Kentucky court manipulated its analysis, or that it was openly hostile to arbitration, or that it was using smoke and mirrors – but just barely.

Justice Kagan suggested that the Kentucky court was acting covertly, saying, "The [FAA] also displaces any rule that covertly [prohibits arbitration of a particular type of claim] by disfavoring contracts that (oh so coincidentally) have the defining features of arbitration agreements."

She also hammered home the idea that the FAA applies to contract formation as well as contract enforcement: "By its terms, then, the [FAA] cares not only about the 'enforce[ment]' of arbitration agreements, but also about their initial 'valid[ity]' – that is, about what it takes to enter into them."

Interesting that the Court never mentioned "preemption" or the Supremacy Clause. I guess it goes without saying.

The decision was 7-1. Justice Gorsuch did not participate. Justice Thomas dissented, as usual, based on his theory that the FAA does not apply to proceedings in state courts.

In a companion case the Court asked the Supreme Court of Kentucky to re-examine its holding to be sure that it was not tainted by its clear-statement rule.

[For recent decisions and pending employment law cases, see Supreme Court Watch.]

Emanuel and Kaplan tipped for NLRB

William J. Emanuel and Marvin E. Kaplan are the President's picks to fill two vacant seats at the NLRB. Once appointed and confirmed by the Senate, the NLRB will be at its full 5-Member strength and will have a Republican majority. Then we will begin to see changes that I have discussed at NLRB Watch.

William (Bill) Emanuel is a shareholder at Littler Mendelson where he practices traditional labor law in the Los Angeles office. A graduate of Georgetown University Law School and Marquette University, he has authored several amicus curiae briefs on behalf of trade associations in cases challenging state laws that allow labor unions to enter employers' private property. He is often recognized as a Best Lawyer in America© and has been a contributor to the ABA's treatise The Developing Labor Law. More at the Littler web site.

Marvin Kaplan is Counsel to Heather L. MacDougall, a Commissioner at the U.S. Occupational Safety and Health Review Commission. He spent six years as a lawyer for committees at the House of Representatives where he focused on investigating allegations of waste, fraud, and abuse by the Department of Labor and National Labor Relations Board. He is a graduate of Washington University in St. Louis Law School and Cornell University. More at LinkedIn.

Both are well qualified to be NLRB Members.

DOJ wavers on class action waiver cases (with video)

Perhaps a better title for this post would be "Elections Matter." Yet I do like "wavers on waivers."

"Am I the only one wondering whether the incoming administration will argue in favor of the NLRB's position in the NLRB v. Murphy Oil case?" That's what I wrote back in January [here].

Three cases pending in the US Supreme Court raise the following issue:

Whether arbitration agreements with individual employees that bar them from pursuing work-related claims on a collective or class basis in any forum are prohibited as an unfair labor practice because they limit the employees' right under the National Labor Relations Act to engage in "concerted activities" in pursuit of their "mutual aid or protection," and are therefore unenforceable under the savings clause of the Federal Arbitration Act.


Even though these cases turn on the National Labor Relations Act, they will have an impact on the non-union private sector workforce (over 90% are non-union).

Opening briefs had been due on April 28, but the Acting Solicitor General requested a delay. The Court granted a delay until June 9.

Why the delay in briefing? The Acting Solicitor General's request says:

"[T]he current briefing schedule is no longer adequate for the government [because] . . . [t]he Acting Solicitor General is engaged in a process of reviewing the position of the United States in these cases" and that he "must . . . consult with new leadership within the government."

So here we go, folks. The NLRB has taken the position (beginning with D.R. Horton (NLRB 2012)) that class action waiver agreements are illegal because they deny employees the statutory right to engage in concerted activities for mutual aid and protection. But the Department of Justice takes over a case once it gets to the US Supreme Court. It was a Democrat-dominated NLRB that decided D.R. Horton in 2012, and the Republicans are running the DOJ in 2017. Elections matter, my friends.

Courts have divided on the central issue, and the following cases are all consolidated and pending at the US Supreme Court:

Personally, I expect the government to do an about-face and disown the basic D.R. Horton rule.

Oral arguments should be scheduled for the Fall of 2017, with a decision coming in 2018.

[For recent decisions and pending employment law cases, see Supreme Court Watch.]


Web site for Ross Runkel, Arbitrator & Mediator: https://www.rossrunkel.com/