CALIFORNIA COMMERCE CLUB, INC.

National Labor Relations Board - Administrative Judge Opinions

Jan 6, 2016

21-CA-149699 (N.L.R.B. Jan. 6, 2016)

JD(SF)–02–16
Commerce, California
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
SAN FRANCISCO BRANCH OFFICE
CALIFORNIA COMMERCE CLUB, INC.,
and Case 21-CA-149699
WILLIAM J. SAUK, an Individual
Lindsay R. Parker, Esq., for the General Counsel.
Jason Kearnaghan, Esq., for the Respondent.
DECISION
STATEMENT OF THE CASE
AMITA BAMAN TRACY, Administrative Law Judge. This case is before me on the parties’
October 15, 2015 motion to submit case on stipulation and stipulation of facts (hereinafter, Joint
Motion), which I approved on October 23, 2015.1 William J. Sauk (Sauk or Charging Party)
filed the charge and amended charge in Case 21–CA–149699 on April 7, 2015, and June 16,
2015, respectively. The General Counsel issued the complaint (the complaint) on July 29, 2015.
The complaint alleges that California Commerce Club, Inc. (Respondent) violated
Section 8(a)(1) of the National Labor Relations Act (the Act) by implementing and maintaining
an Arbitration Agreement and Mandatory Dispute Resolution Process (the Agreement) requiring
its employees, as a condition of employment, since about February 2015 to resolve employment-
related disputes exclusively through individual arbitration and to relinquish any rights they have
to disputes through collective or class action. Furthermore, Respondent required its employees to
comply with the Agreement as a condition of continued employment and to execute a paper
acknowledging receipt of the Agreement. The complaint also alleges that Respondent violated
Section 8(a)(1) of the Act by requiring arbitration proceedings to be confidential and prohibiting
disclosure of “any evidence or award/decision beyond the arbitration proceeding” thereby
interfering with employees’ ability to discuss topics protected by Section 7 of the Act.
Respondent filed a timely answer on August 11, 2015.

1 Abbreviations used in this decision are as follows: “Jt. Mt.” for Joint Motion; “Exh.” for exhibit;
“GC Br.” for General Counsel’s brief; and “R. Br.” for Respondent’s brief.
JD(SF)–02–16
For the reasons that follow, I find that Respondent violated Section 8(a)(1) of the Act
when it implemented and maintained the Agreement, and when it required arbitration
proceedings to remain confidential.
On the joint motion which consists of the stipulated facts and exhibits, and after 5
considering the briefs filed by the General Counsel and Respondent, I make the following2
FINDINGS OF FACT
I. JURISDICTION10
Respondent, a California corporation, operates a hotel and California card casino at its
facility in Commerce, California, where it annually derived gross revenues in excess of $500,000
and purchased and received at its facility in Commerce, California goods valued in excess of
$50,000 from other enterprises within the State of California which had received those goods 15
directly from outside the State of California. Respondent admits, 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
20
A. Arbitration and Confidentiality Provision
Since February 2015, Respondent implemented and maintains the Agreement.3 The
Agreement, a 2 page document, states in pertinent part:
25
In consideration for California Commerce Club, Inc. (hereinafter the “Company”)
employing you or continuing to employ you, and the mutual promises set forth
herein, you and the Company, and its representatives, successors and assigns
(collectively referred to as “The Parties”), agree to the following:
30
[…]
In the event of any dispute, prior to commencing legal action, I or the Company,
whichever is the complaining party, shall give prompt written notice to the other
(as to the Company, this person shall be the Executive Director of Human 35
Resources) of the nature of the dispute, claim or controversy. Upon the receipt of
such written notice, the Parties agree to meet within 30 days in person to discuss

2 Although I have included several citations to the record to highlight particular stipulations or
exhibits, I emphasize that my findings and conclusions are based not solely on the evidence specifically
cited, but rather are based on my review and consideration of the entire record.
3 The General Counsel has no evidence as of the date of the joint motion that Respondent has
enforced the Agreement, or any provision within, to restrict the exercise of employees’ Sec. 7 rights (Jt.
Mt. at 4(10)). Nor does the General Counsel have any evidence that Respondent has ever attempted to use
the Agreement to compel arbitration of a charge filed with the National Labor Relations Board, nor used
the Agreement to discourage employees from filing such charges, or any charge filed with an
administrative agency (Jt. Mt. at 5(11) and (12)).
JD(SF)–02–16
3
in good faith the dispute, claim or controversy for the purpose of attempting to
resolve it informally.
If the Parties cannot resolve their differences in that informal dispute resolution
process, then all claims relating to my recruitment, employment with, or 5
termination of employment from the Company shall be deemed waived unless
submitted to final and binding arbitration by JAMS, subject to the following
requirements:
[…]10
 The arbitration shall be conducted on a confidential basis and there shall
be no disclosure of evidence or award/decision beyond the arbitration
proceeding.
[…]15
 The arbitrator shall have the authority to award all potential damages that
may be awarded in court and the decision and award of the arbitrator shall
be final, binding, and enforceable in the courts.
 Class Action Waiver: All claims must be brought in the employee’s
individual capacity, and not as a plaintiff or participating class member in 20
any purported class, collective, consolidated or representative proceeding,
and must be brought in within the time frame provided by the applicable
statute of limitations for such claim.
 The Arbitrator shall not have the authority to hear or issue an award on
any claim brought on a class, collective, consolidated or representative 25
basis.
In the event that either party files, and is allowed by the courts to prosecute, a
court action on any claim covered by this agreement, the parties agree that they
each agree not to request, and hereby waives his/her/its right to a trial by jury.30
This pre-dispute resolution agreement covers all matters directly or indirectly
related to my recruitment, employment, or termination of employment by the
Company […]
35
(emphasis in original) (Jt. Mt. at Exh. 5.)
Furthermore, the Agreement applies to various claims, including the Fair Labor
Standards Act (FLSA), but sets forth the following where it does not apply:
40
This Agreement does not apply to any Claims by the employee: (a) for state
Workers’ Compensation benefits; (b) for unemployment insurance benefits filed
with the appropriate government entity; (c) arising under the National Labor
Relations Act and filed through a charge with the National Labor Relations
Board; or (d) which are otherwise expressly prohibited by law from being subject 45
to arbitration under this Agreement. This Agreement does not preclude filing an
JD(SF)–02–16
4
administrative charge or complaint with the appropriate government entity if such
filing is protected or required by law.
(Jt. Mt. at Exh. 5.)
5
The Agreement concludes with the following, along with the employee’s signature and the
signature of Jose Garcia, executive director of Respondent’s human resources:
YOU MAY WISH TO CONSULT WITH AN ATTORNEY PRIOR TO
SIGNING THIS AGREEMENT. IF SO, TAKE A COPY OF THIS FORM 10
WITH YOU. HOWEVER, YOU WILL NOT BE OFFERED EMPLOYMENT
UNTIL THIS FORM IS SIGNED AND RETURNED BY YOU.
PLEASE READ THESE PROVISIONS CAREFULLY, BY SIGNING BELOW,
YOU ARE ATTESTING THAT YOU HAVE READ AND UNDERSTOOD 15
THIS DOCUMENT AND ARE KNOWINGLY AND VOLUNTARILY
AGREEING TO ITS TERMS, INCLUDING YOUR WAIVER OF A RIGHT TO
HAVE THIS MATTER LITIGATED IN A COURT OR JURY TRIAL, OR TO
HAVE THIS MATTER RESOLVED ON A CLASS, COLLECTIVE,
CONSOLIDATED OR REPRESENTATIVE BASIS.20
(emphasis in original) (Jt. Mt. at Exh. 5.)
Since February 2015, as a condition of employment, Respondent required its employees
to comply with and agree to be bound by the Agreement by signing acknowledging receipt of the 25
Agreement. Since February 2015 through the date of the stipulated record, Respondent has not
terminated or otherwise disciplined employees for refusing to sign the Agreement.
Along with the Agreement, Respondent provided the employees with a memorandum
which described the Agreement. The memorandum, dated February-March 2015, addressed to 30
all Respondent’s employees from the human resources department states, in pertinent part:
Commerce Casino’s updated Arbitration Agreement and Mandatory Dispute
Resolution Process is attached for your review and signature. Please be advised
that your signed acknowledgment attesting that you have read and understood this 35
document and are knowingly agreeing to its terms is required for Commerce
Casino to continue to employ you.
[…]
40
You are free to take the agreement home, and as stated in the document, you may
wish to consult an attorney prior to signing the agreement. You have until
4/15/15 to consider this document. Failure to sign and return this document to the
Human Resources department by 4/15/15 will result in termination of your
employment with Commerce Casino.45
(Jt. Mt. at Exh. 6.)
JD(SF)–02–16
5
Contained with Respondent’s Agreement is a confidentiality provision. Specifically, the
Agreement states, “The arbitration shall be conducted on a confidential basis and there shall be
no disclosure of evidence or award/decision beyond the arbitration proceeding.” Respondent
drafted the confidentiality provision contained in the Agreement “to save resources and
reputation costs by arbitrating disputes outside of the public purview, and not in response to5
union activity” (Jt. Mt. at 4(9)).4
B. The Charging Party’s Employment with Respondent
In February 2015, Respondent presented Sauk with the Agreement. Sauk refused to sign 10
the Agreement. Respondent did not discipline or terminate Sauk for failing to sign the
Agreement. On May 8, 2015, Sauk voluntarily resigned from Respondent.
III. ANALYSIS
15
In the Joint Motion, the parties agreed to the following issues:
(1) Whether Respondent’s maintenance of the Agreement violates Section 8(a)(1) of the
Act;
20
(2) Whether employees would reasonably conclude that the confidentiality provision of
the Agreement precludes employees from engaging in conduct protected by Section 7
of the Act.
A. Respondent’s Agreement Violates Section 8(a)(1) of the Act. 25
The complaint alleges, at paragraphs 4(a) and (b) and 5, that since February 2015,
Respondent has required employees, as a condition of employment, to be bound by the
Agreement which requires individual arbitration proceedings and relinquishes any rights to
resolve disputes through collective or class action thereby violating Section 8(a)(1) of the Act. 30
The parties stipulated that Respondent required the employees to comply with, agree to be bound
by, and sign the Agreement as a condition of continued employment. I find that Respondent
imposed a mandatory rule, and as such the Agreement should be evaluated in the same manner
as any workplace rule. See D. R. Horton, Inc., 357 NLRB No. 184 (2012), enfd. denied in
relevant part 737 F.3d 344 (5th Cir. 2013), petition for rehearing en banc denied (5th Cir. No. 35
12–60031, April 16, 2014); Murphy Oil USA, Inc., 361 NLRB No. 72 (2014), enfd. denied in
relevant part No. 14-60800, 2015 WL 6457613, __ F.3d __ (5th Cir. Oct. 26, 2015).
Section 8(a)(1) of the Act provides that it is an unfair labor practice for an employer to
interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in Section 7 40
of the Act. The rights guaranteed in Section 7 include the right “to form, join or assist labor
organizations, to bargain collectively through representatives of their own choosing, and to

4 The General Counsel has no evidence that the confidentiality provision in the Agreement was
promulgated in response to union activity (Jt. Mt. at 4(9)). The General Counsel stipulated that it is not
pursuing this complaint on the grounds that any of the provisions contained in the Agreement or the
Agreement alone was promulgated by Respondent in response to union activity or that the Agreement and
its provisions have been enforced by Respondent to restrict Sec. 7 rights (Jt. Mt. at 5(13)).
JD(SF)–02–16
6
engage in other concerted activities for the purpose of collective bargaining or other mutual aid
or protection . . .” The Board has consistently held that collective legal action involving wages,
hours, and/or working conditions is protected concerted activity under Section 7. See, e.g.,
Spandsco Oil & Royalty Co., 42 NLRB 942, 949–950 (1942); United Parcel Service, 252 NLRB
1015, 1018, 1022 fn. 26 (1980), enfd. 677 F.2d 421 (6th Cir. 1982); D. R. Horton, supra, slip op. 5
at 2.
In Murphy Oil USA, the Board reaffirmed its ruling in D. R. Horton, in which it held that
mandatory arbitration agreements which preclude the filing of joint, class, or collective claims
addressing wages, hours, or other working conditions in any forum, arbitral or judicial, is 10
protected concerted activity and unlawfully restrict employees’ Section 7 rights, thus violating
Section 8(a)(1) of the Act.
Furthermore, the Board held that Section 8(a)(1) of the Act is violated when an employer
requires its employees to agree to resolve all employment-related claims through individual 15
arbitration. Mandatory arbitration agreements which bar employees from bringing joint, class, or
collective actions regarding the workplace in any forum restrict employees’ substantive right
established by Section 7 of the Act to improve their working conditions through administrative
and judicial litigation. Countrywide Financial Corp., supra, slip op. at 4 (Board made clear in D.
R. Horton, supra, slip op. at 12, that employers are “free to insist” that employees arbitrate their 20
employment claims and to require that the “arbitral proceedings be conducted on an individual
basis,” but only “[s]o long as [they left] open an judicial forum for class and collective claims . . .
” (emphasis in original)).
When evaluating whether a rule, including a mandatory arbitration provision, violates 25
Section 8(a)(1), the Board applies the test set forth in Lutheran Heritage Village-Livonia, 343
NLRB 646 (2004). See U-Haul Co. of California, 347 NLRB 375, 377 (2006), enfd. 255
Fed.Appx. 527 (D.C. Cir. 2007); D. R. Horton; Murphy Oil; Cellular Sales. Under Lutheran
Heritage, the first inquiry is whether the rule explicitly restricts activities protected by Section 7.
If it does, the rule is unlawful. If it does not, the violation is dependent upon a showing of one of 30
the following: (1) employees would reasonably construe the language to prohibit Section 7
activity; (2) the rule was promulgated in response to [Section 7] activity; or (3) the rule has been
applied to restrict the exercise of Section 7 rights. Lutheran Heritage, 343 NLRB at 647. The
Board in D. R. Horton and Murphy Oil found that mandatory arbitration policies expressly
violated employees’ rights to engage in protected concerted activity under the Lutheran Heritage 35
analysis. See also Brinker International Payroll Co. L.P., 363 NLRB No. 54 (2015). The Board
held that if an arbitration policy is required as a condition of employment, then that rule violates
Section 8(a)(1) of the Act if employees would reasonably believe the policy or rule interferes
with their ability to file a Board charge or access to the Board’s processes, even if policy or rule
does not expressly prohibit access to the Board. Cellular Sales, supra, slip op. at fn. 4. 40
Here, it is undisputed that the Agreement had been maintained as a condition of
employment since February 2015 and explicitly prohibits employees from pursuing employment-
related claims on a class or collective basis. The Agreement states that employees will bring
their claims in an “individual capacity,” and not in a “class, collective, consolidated or 45
representative proceeding.”
JD(SF)–02–16
7
Thus, I find that the arbitration provision was a mandatory rule imposed by Respondent
as a condition of employment and precludes the right to pursue concerted legal action violating
Section 8(a)(1) of the Act. See D. R. Horton, supra, slip op. at 5; Murphy Oil, supra, slip op. at
24. The Agreement requires employees to agree to pursue any dispute they have against
Respondent solely through individual arbitration thereby violating Section 8(a)(1) of the Act.5
Respondent’s Arguments
Many of Respondent’s arguments concerning the validity of the Board’s decision in D. R.
Horton and Murphy Oil have been addressed previously by the Board. Respondent argues I 10
should not follow Murphy Oil and D. R. Horton, and its progeny (R. Br at 3). Respondent,
however, failed to provide valid arguments distinguishing its arbitration policy with the ones
found in D. R. Horton and Murphy Oil. Because Murphy Oil and D. R. Horton are Board
precedents that have not been overturned by the Supreme Court or altered by a Board majority, I
must follow them.5 Manor West, Inc., 311 NLRB 655, 667 fn. 43 (1993); see also Waco, Inc., 15
273 NLRB 746, 749 fn. 14 (1984) (“We emphasize that it is a judge’s duty to apply established
Board precedent which the Supreme Court has not reversed. It is for the Board, not the judge, to
determine whether precedent should be varied.”). Overall, Respondent has not raised novel
arguments, and moreover, any appeal to change Board law must be made directly to the Board.
20
First, Respondent argues that Sauk did not engage in concerted activity (R. Br. at 5–6).
Respondent specifically argues that “it cannot be presumed” that Sauk engaged in protected
concerted activity when he refused to sign the Agreement, and that he filed the Board charge
only on behalf of himself. I reject Respondent’s argument. At issue in this complaint is the
maintenance of a rule prohibiting the filing of class claims, not whether Sauk has engaged in 25
activity prohibited by the rule. See The Rose Group, 363 NLRB No. 75, slip op. at 3 (2015).
Respondent’s Agreement essentially invokes a term and condition of continued
employment for all employees at Respondent, including Sauk. The Agreement precludes the
employees, including Sauk, from acting in concert to file collective or class litigation regarding 30
wages, hours, or other working conditions. The Agreement forces employees to pursue their
claims against Respondent individually which fundamentally interferes with employees’ core
Section 7 rights of acting in concert to support one another. Sauk engaged in concerted activity
when he refused to sign the Agreement, thereby preserving his Section 7 rights. In other words,
Sauk engaged in concerted activity when he refused to prospectively waive his Section 7 right to 35
engage in concerted activity. See On Assignment Staffing Services, 362 NLRB No. 189, slip op.
at 1, 5–8 (2015).
In addition, Sauk’s action of protesting the Agreement and filing the Board charge falls
within the ambit of seeking to further the rights of all his coworkers even if he did not discuss 40

5 As Respondent points out, the Fifth Circuit disagreed with the Board in D. R. Horton, and denied
enforcement of the Board’s holdings. The Board explicitly addressed this issue in Murphy Oil, supra, slip
op. 6–11.
JD(SF)–02–16
8
his actions with them.6 Furthermore, a rule such as the Agreement may be found unlawful even
when a covered employee does not engage in protected concerted activity prohibited by the rule.
Murphy Oil, supra, slip op. at 13 (citing World Color (USA) Corp., 360 NLRB No. 37, slip op. at
2 (2014)) (“[A]n employer may violate Section 8(a)(1) even where an employee has not engaged
in protected concerted activity—if, for example, the employer maintains a rule that reasonably 5
would be interpreted by the employees as prohibiting Section 7 activity. . . .”); D. R. Horton,
supra, slip op. at 2–3. Thus, Sauk engaged in protected concerted activity when he refused to
sign the Agreement. Furthermore, Sauk filed the instant unfair labor practice charge on behalf of
all Respondent’s employees.
10
Next, Respondent argues that Sauk “has no standing” because he resigned prior to the
complaint being issued (R. Br. at 6–7). On the contrary, Sauk retained “standing” even though
he resigned before this complaint was issued.7 The Board has long held that the broad definition
of “employee” contained in Section 2(3) of the Act covers former employees. See Briggs Mfg.
Co., 75 NLRB 569, 571 (1947); accord Cellular Sales of Missouri, supra, slip op. at 1 fns. 3, 7; 15
see also Frye Electric Inc., 352 NLRB 245, 357 (2008); Redwood Empire, Inc., 296 NLRB 369,
391 (1989). Moreover, Section 102.9 of the Board’s Rules & Regulations provides that a charge
may be filed by “any person” without regard to whether that person is a Section 2(3) employee.
See also Leslie’s Poolmart, Inc., 362 NLRB No. 184, slip op. at fn. 2 (2015) (charge filed by
former employee). 20
Respondent cites to Model A & Model T Car Corp., 259 NLRB 555 (1981), cited in
Halstead Metal Products v. NLRB, 940 F.2d 66, 70 (4th Cir. 1991), for the proposition that an
employee who voluntarily resigned was not protected by the Act.8 The situation here is not
analogous. In Model A & Model T Car Corp., the General Counsel alleged a violation of the Act 25
when an employer sent a letter to a former employee threatening to sue her for libel when after
she resigned, she testified before a state agency regarding her working conditions while
employed. The Board determined that the employer’s action of a libel lawsuit against the former
employee was not covered by the Act since the employee was no longer employed by the
employer. In contrast, while employed by Respondent, Sauk filed his charge regarding the 30
Agreement with the Board. Even though Sauk resigned on May 8, 2015, Sauk still retained

6 The charge states: Beginning in or about February 2015, the Employer has required all employees,
as a condition of employment, to agree to an updated mandatory arbitration agreement seeking to prohibit
class and representational actions in court and requiring employees to waive their right to participate in
class and/or representational actions as a condition of continued employment.
7 Respondent also argues that Sauk has no “standing” under Art. III of the United States Constitution
because he did not sign the Agreement, and suffered no injury since he was not disciplined or terminated
for failing to sign the Agreement (R. Br. at 6 fn. 4). Sauk, on the contrary, has suffered an “injury.”
Respondent forced Sauk to make a choice between waiving his Section 7 rights or face adverse
consequences. Simply because Respondent did not follow through on its consequences does not mean
that Sauk suffered no harm. See On Assignment Staffing Services, 362 NLRB No. 189, slip op. 5 (2015)
(opt-out provision of arbitration agreement forced employees to reveal their sentiments concerning Sec. 7
activity).
8 Respondent also cites to other court cases including a Supreme Court case for the proposition that
since Sauk resigned he no longer has the right to improve the working conditions of his former employer
(R. Br. at 6–7). As explained, any person can file a charge alleging unfair labor practices as an employer.
The relief the General Counsel and Sauk seek is on behalf of all Respondent’s employees since the
invocation of the Agreement.
JD(SF)–02–16
9
standing since the Act covers former employees. Thus, Sauk clearly retains standing in this
matter.
Respondent then alleges that the Federal Arbitration Act (FAA), 9 U.S.C. §§ 1 et. seq.,
preempts the Board from prohibiting class or collective actions waivers in arbitration agreements 5
(R. Br at 7–11). However, the Board clearly set forth its reasons why the Act does not conflict
with or undermine the FAA. See Murphy Oil, supra, slip op. at 6; see also D. R. Horton, supra,
slip op. at 10–16. First, the Board found that mandatory arbitration agreements are unlawful
under the FAA’s savings clause because they extinguish substantive rights guaranteed by Section
7. Second, Section 7 amounts to a “contrary congressional command” overriding the FAA. 10
Finally, the Board found that the Norris-LaGuardia Act indicates that the FAA should yield to
accommodate Section 7 rights. The Norris-LaGuardia Act prevents enforcement of private
agreements that prohibit individuals from participating in lawsuits arising out of labor disputes.
In Murphy Oil, the Board stated, “Arbitration [under the FAA] is a matter of consent, and not
coercion,” and a valid arbitration agreement may not require a party to prospectively waive its 15
“right to pursue statutory remedies.” Murphy Oil, supra, slip op. 1–2. Applying the Board’s
holding recited above, in this instance the FAA does not preclude a finding that Respondent’s
waiver is invalid.
Furthermore, Respondent argues that AT & T Mobility v. Concepcion, 131 S.Ct. 1740, 20
1746 (2011), a Supreme Court decision issued after D. R. Horton, and other related case law,
support the argument that D. R. Horton must be rejected (R. Br at 3, 9–11, 14–15). Respondent
argues that I am bound by these Supreme Court cases (R. Br. at 3–4). Again, the Board in
Murphy Oil addressed those arguments, distinguishing that Section 7 of the Act substantively
guarantees employees the right to engage in collective action, including collective legal action, 25
for mutual aid and protection concerning wages, hours, and working conditions. See Murphy Oil,
supra, slip op. at 7–9; Chesapeake Energy Corp., supra, slip op. at 3. Further, as to contrary
circuit court decisions, the Board is not required to acquiesce in adverse decisions of the Federal
courts in subsequent proceedings not involving the same parties. Murphy Oil, supra, slip op. 2
fn. 17, citing Enloe Medical Center v. NLRB, 433 F.3d 834, 838 (D.C. Cir. 2005).30
Thereafter, Respondent alleges that Section 7 of the Act does not include the right to
pursue class action complaint, and does not constitute protected concerted activity (R. Br at 11–
13). However, as the majority reaffirmed in Murphy Oil, “the NLRA does not create a right to
class certification or the equivalent, but as the D. R. Horton Board explained, it does create a35
right to pursue joint, class, or collective claims if and as available, without the interference of an
employer-imposed restraint.” Murphy Oil, supra, slip op. at 2 (citing D. R. Horton, supra, slip op.
at 10 fn. 24). Here, Respondent’s Agreement, as a condition of employment, precludes
employees from pursuing claims concertedly and thus “amounts to a prospective waiver of a
right guaranteed by the NLRA.” Murphy Oil, supra, slip op. at 9 (citing National Licorice Co. v. 40
NLRB, 309 U.S. 350, 361 (1940), and J.I. Case Co. v. NLRB, 321 U.S. 332, 337 (1944)). This
preclusion infringes on employees’ Section 7 rights, and thus violates Section 8(a) (1) of the Act.
Respondent finally argues that “even if Section 7 confers a right to class action
procedures, Section 7 rights can be waived” (R. Br. at 13–14). Again, the Board found in D. R.45
Horton that “employers may not compel employees to waive their NLRA right to collectively
pursue litigation of employment claims in all forums arbitral and judicial” as a condition of
employment. Supra, slip op. at 12 (emphasis in original). In Murphy Oil, the Board stated,
JD(SF)–02–16
10
“That an employer may collectively bargain a particular grievance-and-arbitration procedure
with a union is not to say that it may unilaterally impose any dispute-resolution procedure it
wishes on unrepresented employees, including a procedure that vitiates Section 7 rights, simple
because it takes the form of an agreement.” Supra, slip op. at 15. In addition, “Federal labor law
and policy . . . prohibit agreements in which employees prospectively waive their right to 5
engage in concerted activity for mutual aid or protection.” On Assignment Staffing Services,
supra, slip op. at 8 (2015). The Board has consistently struck down agreements that require
employees to prospectively waive their Section 7 rights. See Mandel Security Bureau, 202
NLRB 117, 119 (1973) (Board found unlawful an agreement requiring discharged employee to
waive right to “future charges and concerted activities” in exchange for reinstatement); Ishikawa 10
Gasket America, Inc., 337 NLRB 175, 175–176 (2001) (Board found settlement agreement
overly broad when employer offered monetary settlement in exchange “for refraining from
protected concerted activities for a 1-year period”). Thus, Respondent may not require its
employees to waive their Section 7 rights.
15
Accordingly, I find that Respondent’s maintenance of the Agreement, as a mandatory
condition of employment, prohibited employees from bringing forth claims against Respondent
in a concerted manner which thereby violates Section 8(a)(1) of the Act as set forth in D. R.
Horton and Murphy Oil.
20
B. Respondent’s Confidentiality Provision
The complaint alleges, at paragraph 4(c), that Respondent violated Section 8(a)(1) of the
Act by requiring that any arbitration proceedings be confidential and prohibiting any discussion
of “any evidence or award/decision beyond the arbitration proceeding” thereby interfering with 25
employees’ ability to discuss topics covered by Section 7 of the Act which precludes employees
from engaging in conduct protected by Section 7.9
The right of employees to discuss workplace matters, including any evidence or
arbitration award or decision, is a fundamental Section 7 right. Although the confidentiality 30
provision of the Agreement only prohibits discussion of evidence obtained during the course of
the arbitration proceeding, it still explicitly limits employees’ right to discuss terms and
conditions of employment such as wages. It is well settled that any work rule which prohibits
employees from discussing their working conditions such as wages is unlawful. Professional
Janitorial Services of Houston, Inc., 363 NLRB No. 35 (2015) (finding confidentiality provision 35
of employer’s arbitration policy was unlawfully overbroad: “all statements and information made
or revealed during arbitration . . . except on a ‘need to know’ basis or as permitted or required by
law), citing Rio All-Suites Hotel & Casino, 362 NLRB No. 190, slip op. at 1–3 (2015) (finding
unlawful rule that prohibited disclosure of “any information about the Company which has not
been shared by the Company with the general public) ; Fresh & Easy Neighborhood Market, 361 40
NLRB No. 8, slip op. at 2–3 (2014); Lily Transportation Corp., 362 NLRB No. 54, slip op at fn.
2 (2015). In as much as workplace rules precluding employees to discuss grievances and
disciplinary actions violate the Act, the rule set forth by Respondent does the same. Double
Eagle Hotel & Casino, 341 NLRB No. 17, slip op. at 6–5 (2004), enfd. 414 F.3d 1249 (10th Cir.

9 The confidentiality provision of the Agreement states, “The arbitration shall be conducted on a
confidential basis and there shall be no disclosure of evidence or award/decision beyond the arbitration
proceeding.”
JD(SF)–02–16
11
2005), cert. denied 546 U.S. 1170 (2006) (finding unlawful handbook rule that prohibited
disclosure of “confidential information,” including “grievance/complaint information”). Thus,
the confidentiality provision in the Agreement violates Section 8(a)(1) of the Act.
Respondent’s Arguments5
Respondent argues that the Federal Arbitration Act requires enforcement of the
arbitration terms, including any confidentiality provisions. Respondent states, “Confidentiality
ensures that parties save resources and reputation costs by arbitration disputes outside the
public purview” (R. Br at 4, 18–21, emphasis in original). Respondent also argues that the 10
confidentiality provision of the Agreement does not “prevent an employee from discussing
anything else related to their employment, including the very events or circumstances that give
rise to arbitration proceedings” (R. Br. at 17, emphasis in original). In other words, employees
may still discuss terms and conditions of employment. I disagree with all Respondent’s
arguments. Respondent’s confidentiality language is broadly written with language that 15
encompasses all aspects of the dispute. These “very events or circumstances that give rise to
arbitration proceedings” could be “any evidence” as precluded by the confidentiality provision.
Nothing in the provision suggests that the prohibition is as limiting as Respondent suggests.
“[E]mployees should not have to decide at their own peril what information is not lawfully
subject to such a prohibition.” Hyundai American Shipping Agency, Inc., 357 NLRB No. 80, slip 20
op. at 12 (2011).
Respondent claims that its confidentiality provision ensures that employees do not
discuss “confidential business records or information protected by the right of privacy produced
in the course of discovery” (R. Br. at 17). Respondent cites to two Board decisions which found 25
lawful employers’ handbook rules. In Lafayette Park Hotel, 326 NLRB 824, 826 (1998), enfd.
203 F.3d 52 (D.C. Cir. 1999), the Board found lawful an employer rule setting forth
unacceptable conduct as divulging private employer information to employees and other
individuals or entities not authorized to receive such information. The employer argued that it
had the right to keep its business records confidential. With regard to the factual circumstances 30
in Lafayette Park Hotel, the Board reasoned that a reasonable employee would know that the rule
would not prohibit discussion of wages and working conditions among employees or a union. In
K-Mart, 330 NLRB 263, 263 (1999), the Board, citing Lafayette Park Hotel, found the
employer’s confidentiality provision in its handbook lawful. The provision stated that company
business and documents are confidential, and disclosure of such information is prohibited. 35
The above cases may be distinguished from the facts presented here. The above rules
occurred in employee handbooks while the instant confidentiality provision occurred in the
Agreement which requires mandatory arbitration while prohibiting class or collective action.
Furthermore, the confidentiality provision in the Agreement does not specify what may not be 40
shared with others such as confidential business records and what may be shared with others
such as the “very events” leading to the arbitration proceeding as Respondent suggests. As
discussed above, the Board recently determined that a similar confidentiality provision in an
arbitration agreement violated the Act as unlawfully overbroad. See Professional Janitorial
Services of Houston, supra, slip op. at 1. Contrary to Respondent’s assertions, the confidentiality 45
provision is unlawfully overbroad as it prohibits the discussion of terms and conditions of
employment. See also Rio All-Suites Hotel & Casino, supra, slip op. at 1–3 (2015) (finding
JD(SF)–02–16
12
unlawful rule that prohibited disclosure of any information about the Company which has not
been shared by the Company with the general public).
Accordingly, I find that Respondent’s confidentially provision within the Agreement
violates the Act. In doing so, I find that Respondent restricted the exercise of employees’ 5
Section 7 rights in violation of Section 8(a)(1) of the Act.
CONCLUSIONS OF LAW
1. Respondent is an employer within the meaning of Section 2(2), (6), and (7) of the Act.10
2. By requiring employees to sign and maintain since February 2015, an Arbitration
Agreement and Mandatory Dispute Resolution Process under which employees are compelled, as
a condition of employment, to waive the right to maintain class or collective actions in all
forums, whether arbitral or judicial, Respondent has engaged in unfair labor practices affecting 15
commerce within the meaning of Section 2(6) and (7) of the Act, and has violated Section
8(a)(1) of the Act.
3. By requiring that any arbitration proceedings be confidential and prohibiting any
discussion of any evidence or award/decision beyond the arbitration proceeding, Respondent 20
violated Section 8(a)(1) of the Act.
REMEDY
Having found that Respondent has engaged in certain unfair labor practices, I shall order 25
it to cease and desist there from and to take certain affirmative action designed to effectuate the
policies of the Act.
As I have concluded that the Agreement is unlawful, the recommended Order requires
that Respondent revise or rescind it in all its forms to make clear to employees that the 30
Agreement does not constitute a waiver of their right to maintain employment–related joint,
class, or collective actions in all forums. Respondent shall notify all current and former
employees since February 2015 who were required to sign the Agreement in any form that it has
been rescinded or revised, and if revised, provide them a copy of the revised Agreement.
35
In addition, any revised Agreement shall inform employees that the arbitration
proceedings are not confidential and employees are not prohibited from discussing any evidence
or award/decision beyond the arbitration proceeding.
Respondent shall post a notice in all locations where the Agreement, or any portion of it 40
requiring all and/or enumerated employment-related disputes to be submitted to individual
arbitration, was in effect. See, e.g., U-Haul of California, supra, fn. 2; D. R. Horton, supra, slip
op. at 17; Murphy Oil, supra, slip op. at 22. Respondent is also ordered to distribute appropriate
remedial notices to its employees electronically, such as by email, posting on an intranet or
internet site, and/or other appropriate electronic means, if it customarily communicates with its 45
employees by such means. J. Picini Flooring, 356 NLRB No. 9 (2010).
JD(SF)–02–16
13
On these findings of fact and conclusions of law and the entire record, I issue the
following recommended10
ORDER
5
Respondent, California Commerce Club, Inc., its officers, agents, successors, and assigns,
shall
1. Cease and desist from
10
(a) Maintaining a mandatory arbitration policy that requires employees, as a condition
of employment, to waive the right to maintain class or collective actions in all forums, whether
arbitral or judicial.
(b) Maintaining a rule that prohibits the discussion of terms and conditions of 15
employment by prohibiting employees from discussing matters regarding an arbitral proceeding.
(c) In any like or related manner interfering with, restraining, or coercing employees in
the exercise of the rights guaranteed to them by Section 7 of the Act.
20
2. Take the following affirmative action necessary to effectuate the policies of the Act.
(a) Rescind the Agreement in all its forms, or revise it in all its forms to make clear that
the Agreement does not constitute a waiver of employees’ right to initiate or maintain
employment-related joint, class, or collective actions in all forums, and that it does not prohibit 25
employees’ discussion of terms and conditions of employment by prohibiting employees from
discussing matters regarding an arbitral proceeding.
(b) Notify all current and former employees since February 2015 who were required to
sign the Agreement of the rescinded, or revised, arbitration provision, to include providing them 30
with a copy of any revised provisions, acknowledgment forms, or other related documents, or
specific notification that the arbitration provision has been rescinded.
(c) Within 14 days after service by the Region, post at its facility in Commerce,
California, copies of the attached notice marked “Appendix.”11 Copies of the notice, on forms 35
provided by the Regional Director for Region 21, after being signed by Respondent’s authorized
representative, shall be posted by Respondent and maintained for 60 consecutive days in
conspicuous places including all places where notices to employees are customarily posted. In
addition to physical posting of paper notices, the notices shall be distributed electronically, such
as by email, posting on an intranet or an internet site, and/or other electronic means, if 40

10 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the
findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the Rules, be adopted
by the Board and all objections to them shall be deemed waived for all purposes.
11 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice
reading “Posted by Order of the National Labor Relations Board” shall read “Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations
Board.”
JD(SF)–02–16
14
Respondent customarily communicates with its employees by such means. Reasonable steps
shall be taken by Respondent to ensure that the notices are not altered, defaced, or covered by
any other material. In the event that, during the pendency of these proceedings, Respondent has
gone out of business or closed the facility involved in these proceedings, Respondent shall
duplicate and mail, at its own expense, a copy of the notice to all current employees and former 5
employees employed by Respondent at any time since February 1, 2015.
(d) 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
Respondent has taken to comply.10
Dated, Washington, D.C. January 6, 2016
15
____________________
Amita Baman Tracy20
Administrative Law Judge
25
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.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT maintain a mandatory arbitration agreement that requires employees, as a
condition of employment, to waive the right to maintain class or collective actions in all forums,
whether arbitral or judicial.
WE WILL NOT maintain a rule that prohibits employees from discussion of terms and
conditions of employment by prohibiting employees from discussing any evidence or
award/decision beyond the arbitration proceeding.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights listed above.
WE WILL rescind the requirement that employees enter into or sign the arbitration provision
that is currently in effect, as a condition of employment, and expunge all such provisions at all of
Respondent’s facilities where Respondent has required employees to sign such provisions.
WE WILL rescind the Arbitration Agreement and Mandatory Dispute Resolution Process (the
Agreement) in all its forms, or revise it in all its forms to make clear that the Agreement does not
constitute a waiver of your right to initiate or maintain employment-related joint, class, or
collective actions in all forums, and that it does not prohibit your discussion of terms and
conditions of employment by prohibiting you from discussing matters regarding an arbitral
proceeding.
WE WILL notify all current and former employees who were required to sign or otherwise
become bound to the Agreement in all its forms that the Agreement has been rescinded or
revised and, if revised, WE WILL provide them a copy of the revised policy.
California Commerce Club, Inc.
(Employer)
Dated By
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
888 South Figueroa Street, 9th Floor, Los Angeles, CA 90017-5449
(213) 894-5200, Hours: 8:30 a.m. to 5 p.m.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/21-CA-149699
or by using the QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National
Labor Relations Board, 1099 14th Street, N.W., Washington, D.C. 20570, or by calling (202) 273-1940.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST NOT BE
ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE OR
COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (213) 894-5184.