COSTA MESA CARS, INC., D/B/A AUTONATION HONDA COSTA; MESA F/K/A POWER HONDA COSTA MESA AND AUTONATIO

National Labor Relations Board - Administrative Judge Opinions

Mar 14, 2016

21-CA-123072 (N.L.R.B. Mar. 14, 2016)

JD(SF)-13-16
Costa Mesa, CA
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
COSTA MESA CARS, INC.; d/b/a
AUTONATION HONDA COSTA MESA; f/k/a
POWER HONDA COSTA MESA and
AUTONATION, INC.,
Respondents.
and Case 21–CA–123072
MICHAEL APPLEBAUM, an Individual
Lindsay R. Parker, Esq.,
for the General Counsel.
Lonnie D. Giamela, Esq.,
for the Respondents.
DECISION
STATEMENT OF THE CASE
ELEANOR LAWS, Administrative Law Judge. This case was tried in Los Angeles,
California, on December 7, 2015. At that time, I admitted into the record a joint stipulation of
facts and numerous joint exhibits. (Jt. Exhs. 1, 2.1)
The original charge in this proceeding was filed by Michael Applebaum (the Charging
Party or Applebaum) through his attorney on February 21, 2014, and an amended charge was
filed on May 27, 2014.2 The General Counsel issued the original complaint on September 21,
2015, and an amendment to the complaint was admitted into the record at the

1 Abbreviations used in this decision are as follows: “Jt. Exh.” for joint exhibit; “GC Exh.” for
General Counsel’s exhibit; “GC Br.” for the General Counsel’s brief; “R Br.” for the Respondents’ brief.
Although I have included several citations to the record to highlight particular exhibits, I emphasize that
my findings and conclusions are based not solely on the evidence specifically cited, but rather are based
my review and consideration of the entire record.
2 Applebaum withdrew the charges but the General Counsel persisted with the complaint.
JD(SF)-13-16
2
hearing on December 7. (GC Exh. 2.) Costa Mesa Cars, Inc. and AutoNation, Inc. (the
Respondents3) filed a timely answer denying all material allegations and setting forth defenses.
This is another case applying the Board’s decisions in D. R. Horton, Inc., 357 NLRB No.
184 (2012), enf. granted in part and denied in part, 737 F.3d 344 (5th Cir. 2013), and Murphy Oil 5
USA, Inc., 361 NLRB No. 72 (2014). Specifically, the complaint alleges the Respondents
violated the National Labor Relations Act (the Act) by maintaining and enforcing agreements
requiring employees to resolve employment-related disputes through individual binding
arbitration (the “Agreements”). 4
10
On the entire record, and after considering the briefs filed by the General Counsel and the
Respondents, I make the following
FINDINGS OF FACT
15
I. CORPORATE STRUCTURE
Respondent AutoNation is a holding company, and is the parent company of Respondent
CMC, among other dealerships. AutoNation has a 100 percent ownership interest in Auto
Holding LLC, a Delaware limited liability company. Auto Holding LLC has a 100 percent 20
ownership interest in AutoNation Enterprises Inc., a Florida Corporation. Auto Nation
Enterprise, Inc. wholly owns Costa Mesa Cars Holding, LLC, a Delaware limited liability
company. Costal Mesa Cars Holding, LLC owns Respondent CMC. Auto Nation Enterprises,
Inc., also wholly owns AutoNation Dealership Holding Corp., a Florida Corporation.
AutoNation Dealership Holding Corp. wholly owns AutoNation Western Regional Management, 25
LLC, a Delaware limited liability company. (GC Exh. 7; Tr. 24–27.)
Respondent AutoNation has no employees for federal income tax purposes. Respondent
AutoNation does not comingle funds or other assets with its indirectly owned dealerships; rather
the funds of separate corporate entities are segregated. AutoNation treats the dealerships as 30
independent corporations. CMC is a distinct and separate corporate entity from AutoNation.
CMC keeps its own books and records, has its own federal tax identification number and
maintains its own bank account. The premises where CMC's employees work is not owned or
leased by AutoNation. (Jt. Exh. 1 at Exh. 7.)
35
At all relevant times, Coleman G. Edmunds has been the Senior Vice President, Deputy
General Counsel and Assistant Secretary of Respondent AutoNation. He has been an officer of
AutoNation since 1998. (Jt. Exh. 1 at Exh. 7.) Aaron Duport has been CMCs’ general manager
during all relevant times, and an agent of CMC. 5 (Jt. Exh. 1 ¶ 6.)

3 Costa Mesa Cars and AutoNation are collectively referred to as the Respondents in this decision
when discussing matters relating to both of them. Each entity is referred to by its name when needed in
order to discuss distinctions between them.
4 The plural term “Agreements” is used because the amended complaint includes agreements similar
to arbitration agreement distributed at CMC. (GC Exh. 2.) With regard to enforcement, however, only
Applebaum’s agreement is at issue.
5 Duport is mistakenly identified as Dupree in the complaint.
JD(SF)-13-16
3
II. JURISDICTION
5
At all material times, Respondent Costa Mesa Cars, Inc. (CMC), a California corporation
with a place of business in Costa Mesa, California, has been engaged in the operation of an
automobile dealership and service shop. The parties admit, and I find, that at all material times,
Respondent Costa Mesa Cars has been an employer engaged in commerce within the meaning of
Section 2(2), (6) and (7) of the Act.10
At all material times Respondent AutoNation, Inc. (AutoNation) a Delaware corporation,
with headquarter offices located in Fort Lauderdale, Florida, has, through its indirect subsidiaries
including Respondent CMC, been engaged in the business of owning automobile dealerships
located throughout the United States. Respondent AutoNation admits that during a 15
representative period, in conducting its business operations, it derived gross revenues in excess
of $500,000 and purchased and received at its headquarter offices in Fort Lauderdale, Florida
goods valued in excess of $50,000 directly from points outside the State of Florida. In its
answer, however, Respondent AutoNation denied it is an employer engaged in commerce.6 (GC
Exh. 1(k).) The parties later stipulated that AutoNation is an employer engaged in commerce 20
within the meaning of Section 2(2), (6), and (7) of the Act. (Jt. Exh. 1 ¶ 5(b).) At the hearing,
however, Respondent AutoNation contended it has no employees. More specifically, during
opening statements, the Respondent stated that AutoNation “does not employ a single
individual.” (Tr. 14.) The only witness called at the hearing, Dan Best, the Vice President of
Human Resources for AutoNation Corporate Management, LLC, testified that AutoNation has25
no employees. (Tr. 29–30.)
While factual stipulations are binding, stipulations regarding questions of law are not.
See Swift & Co. v. Hocking Valley Ry. Co., 243 U.S. 281, 289 (1917). Because Respondent
AutoNation denied it was an employer under the Act in its answer, stated it had no employees in 30
its opening statement, and presented witness testimony on the issue, I decline to bind Respondent
AutoNation to the stipulation as to the legal conclusion that it is an employer under the Act.
The General Counsel argues that nothing in the Act’s definition of “employer” requires it
to have employees. The Act, at Section 2(2), defines “employer” as follows:35
The term "employer" includes any person acting as an agent of an employer, directly or
indirectly, but shall not include the United States or any wholly owned Government
corporation, or any Federal Reserve Bank, or any State or political subdivision thereof, or
any person subject to the Railway Labor Act [45 U.S.C. § 151 et seq.], as amended from 40
time to time, or any labor organization (other than when acting as an employer), or
anyone acting in the capacity of officer or agent of such labor organization.

6 The General Counsel asserts that the Respondents admitted AutoNation is an employer in its
answer. I note, however, that the Respondents denied complaint allegation 4(b), which alleges that “[a]t
all material times, Respondent AutoNation has been an employer engaged in commerce within the
meaning of Section 2(2), (6), and (7) of the Act.” (GC Exhs. 1(g) and (k).)
JD(SF)-13-16
4
The Board, in Operating Engineers Local 487 Health Fund, 308 NLRB 805, 807–808 (1992),
ruled that an entity must not only have employees, but must employ statutory employees to be
considered an employer under the Act. Section 2(3) of the Act defines “employee” as follows:
5
The term “employee” shall include any employee, and shall not be limited to the
employees of a particular employer, unless this subchapter explicitly states otherwise,
and shall include any individual whose work has ceased as a consequence of, or in
connection with, any current labor dispute or because of any unfair labor practice, and
who has not obtained any other regular and substantially equivalent employment, but 10
shall not include any individual employed as an agricultural laborer, or in the domestic
service of any family or person at his home, or any individual employed by his parent or
spouse, or any individual having the status of an independent contractor, or any
individual employed as a supervisor, or any individual employed by an employer subject
to the Railway Labor Act [45 U.S.C. 151 et seq.], as amended from time to time, or by 15
any other person who is not an employer as herein defined.
The Supreme Court, in NLRB v. Bell Aerospace Co. Division, 416 U.S. 267 (1974), held that
managers are also excluded from the definition of “employee” under the Act.
20
The General Counsel asserts that the signature of Coleman Edmunds, who is an officer of
AutoNation and its Deputy General Counsel, appears on the Agreements. While this is true, it
does not establish that Edmunds is a statutory employee of AutoNation. Because the General
Counsel did not prove AutoNation has any statutory employees, I find the burden to establish
AutoNation is a statutory employer, standing alone, has not been met. 25
The General Counsel contends that AutoNation was a direct participant in the alleged
distribution and maintenance of the Agreements. Under the direct participation theory of
liability, “a parent corporation may be held liable for the wrongdoing of a subsidiary where the
parent directly participated in the subsidiary's unlawful actions.” Esmark Inc. v. NLRB, 887 F.2d 30
739, 756 (7th Cir. 1989). A parent company may be derivatively liable for a subsidiary’s actions
when the parent or other affiliated corporation disregards the separateness of its subsidiary or
affiliated corporations and exercises direct control over specific transactions. American Electric
Power Co., 302 NLRB 1021, 1023 (1991), enf. mem. 976 F.2d 725 (4th Cir. 1992). In such
cases, the Board may “permissibly find that a parent corporation should not be permitted to act 35
through its subsidiaries to the detriment of the subsidiaries' workforce and yet escape liability for
acts which it has mandated.” Esmark Inc., supra at 757; See also Smithfield Foods, 347 NLRB
1225 fn.2 (2006); See also American Electrical Power Co., 302 NLRB 1021, 1023 (1991).
Though it does not use any particular term of art, the complaint clearly alleges that 40
Respondent AutoNation directly maintained the arbitration agreements, participated in the action
to remove the Charging Party’s lawsuit to federal court, and participated in filing the motion to
compel arbitration. “All that is requisite in a valid complaint before the Board is that there be a
plain statement of the things claimed to constitute an unfair labor practice that the respondent
may be put upon his defense.” American Newspaper Publishers Assn. v. NLRB, 193 F.2d 782, 45
800 (7th Cir. 1951), affd. 345 U.S. 100 (1953), quoting from NLRB v. Piqua Munising Wood
Products Co., 109 F.2d 552, 557 (6th Cir. 1940). Accordingly, I find that if the General Counsel
JD(SF)-13-16
5
can establish AutoNation directly participated in the conduct ascribed to it, jurisdiction may
attach to it as a direct participant with its subsidiary employers, including CMC, in the alleged
violations. This is discussed below.7
III. FACTUAL BACKGROUND5
A. The Arbitration Agreements
On April 19, Peter Vano, AutoNation Western Region Management, LLC’s Senior
Director for Human Resources, sent an email to the general managers of dealerships in 10
California. The email stated:
The Company is rolling out an update to the California Arbitration Agreement to all
AutoNation Associates in California. Please review the attachment which includes the
updated agreement, along with a memorandum which provides background information 15
and roll-out instructions for all California Associates.
Your help is needed to roll out this updated agreement to all Associates in your store
(excluding any Associates covered by a collective bargaining agreement) through the
email distribution process outlined below. We ask that you sign the updated agreement as 20
well.
Roll-Out To All CA Store Associates
Promptly email your store's Department Heads using the attached Department 25
Head email template to:
o Notify them of this distribution process and request that they sign the updated
agreement
o Instruct them to promptly email their Department Associates using the attached
Associate email template30
o Please be sure the AutoNation Arbitration Program attachment is included.
• Ensure that management and/or Region HR follow up in-person/one-on-one with
Associates who have not returned the agreement after one week— providing a
courtesy copy of the Department Head's email, the memorandum and the agreement, 35
since some Associates may not have reliable or regular access to email.
• Direct any questions from Associates to Region HR (as noted in the attached
memorandum).
40

7 The complaint also asserts that Duport is an agent of AutoNation. I find that the General Counsel
has established this allegation. As discussed herein, the general managers, including Duport, carried out
instructions to disseminate and collect arbitration agreements from employees bearing AutoNation’s
officer’s signature. The other general managers were not alleged as agents of AutoNation, however, so in
the event a reviewing authority finds AutoNation’s liability is limited to an agency theory based on
Duport’s actions, the remedy portion of this complaint would only apply to Costa Mesa Cars and
AutoNation.
JD(SF)-13-16
6
Secure all signed agreements returned to you. Please be sure each agreement includes
the Associate's PRINTED name and date of signing as well.
• Deliver all signed agreements to Region HR.
5
Target Due Date:
• Monday, April 29, 2013 to obtain signed agreements.
• Monday, May 6, 2013, to deliver all signed agreements to Region HR.10
(GC Exh. 6, emphasis in original.) Vano instructed the general managers to contact him or their
regional human resources representatives with any questions. He included a template for the
general managers to pass on to department heads, stating:
15
Department Heads:
The Company is rolling out an update to the California Arbitration Agreement to all
AutoNation Associates in California. Review the attachment which includes the updated
agreement, along with a memorandum which provides background information and roll-20
out instructions for all California Associates.
Roll-Out to All Department Associates
Promptly email (preferably via group email) your Department Associates regarding this
roll-out using the attached email template. Be sure the AutoNation Arbitration Program 25
attachment is included.
Follow up in-person/one-on-one with Associates who have not returned the agreement
after one week. Provide a courtesy copy of your email, the memorandum and agreement
(two versions), since some Associates may not have reliable or regular access to email. 30
Other store management and/or Region HR may assist with this follow-up as appropriate.
Direct any questions from Associates to Region HR (as noted in the attached
memorandum). Secure all signed agreements provided to you. Please be sure each
agreement includes the Associates PRINTED name and date of signing as well.35
Deliver all signed agreements to my attention.
Due Date: Monday April 29, 2013, to complete the roll-out and deliver signed
agreements.40
(Tr. 24; GC Exh. 6.)
The arbitration agreement (Agreement) attached to Vano’s email provides:
45
ARBITRATION AGREEMENT
PLEASE TAKE TIME TO READ AND CONSIDER THIS AGREEMENT
JD(SF)-13-16
7
Arbitration of Disputes. Both employee signing below (the ''Employee") and the Company
(as defined below) agree that any claim, dispute, and/or controversy between them which
would otherwise require or allow resort to any court or other governmental dispute
resolution forum arising from, or related to, or having any relationship or connection 5
whatsoever with Employee's seeking employment with, employment by, termination of
employment from, or other association with the Company, shall be resolved through
mandatory, neutral binding arbitration on an individual basis only. For purposes of this
agreement, the "Company'' is defined as the entity Employee is employed by, together
with its parents, subsidiaries, affiliates, predecessors, successors and assigns, and each of 10
their respective owners, directors, officers, managers, employees, vendors, and agents.
This Agreement covers all theories and disputes, whether styled as an individual claim,
class action claim, private attorney general claim or otherwise, and includes, but is not
limited to, any claims of discrimination, harassment, breach of contract, tort, or alleged
violations of statute, regulation or ordinance, or any claims in equity. Any arbitration 15
hereunder shall be governed by the Federal Arbitration Act (9 U.S.C.§1 et seq., hereinafter
the “FAA”) and not by any state law concerning arbitration, and, except as modified by this
Agreement, In conformity with the Federal Rules of Evidence, the Federal Rules of Civil
Procedure, and the substantive law governing the claims pled. This Agreement shall not be
construed to allow or permit the consolidation or joinder of other claims or controversies 20
involving any other employees, and no matter whatsoever will proceed as a class action,
collective action, private attorney general action or any similar representative action. No
arbitrator shall have the authority under this agreement to order any such class,
representative or similar action without the express written consent and agreement of
both employee and the Company. The class action waiver referenced in this paragraph does 25
not waive Employee’s rights under Section 7 of the National Labor Relations Act. Employee
will not be retaliated against for concertedly challenging the validity of the class action
waiver through class or collective actions seeking to enforce Employee's employment rights.
Claims Excluded from Binding Arbitration, The sole exceptions to the mandatory arbitration 30
provision are claims arising under the National Labor Relations Act which are brought
before the National Labor Relations Board, claims for medical and disability benefits under
Workers' Compensation, claims filed with the state for Unemployment Compensation, and
any claims. or disputes arising out of any other written contracts between Employee and
the Company where the Contract specifically· provides for resolution through the courts. 35
Nothing herein shall prevent Employee from filing and pursuing administrative proceedings
only before the U.S. Equal Employment Opportunity Commission or an equivalent state
agency (although If Employee chooses to pursue a claim following the exhaustion of such
administrative remedies, that claim would be subject to arbitration).
40
Waiver of Right to Participate in Class Actions. Employee understands and acknowledges
that the terms of this· Agreement include a waiver of any substantive or procedural rights
that Employee may have to bring or participate in an action on a class, collective, private
attorney general, representative or other similar basis. This class action waiver does not
take away or restrict the right of Employee to pursue Employee’s own claims, but only 45
JD(SF)-13-16
8
requires that any such claims be pursued in Employee's own individual capacity, rather
than on a class, collective, private attorney general, representative or similar basis.
Severability. If any portion of this Agreement is deemed invalid or unenforceable, It shall not
invalidate the other provisions of this Agreement; provided however, that if the provision 5
prohibiting class wide arbitration is deemed invalid or unenforceable, then this entire
Arbitration Agreement shall be null and void.
Exclusive Agreement. Any agreement contrary to or modifying, the foregoing arbitration
provisions must be· entered into, in writing, by the President of the company oral 10
representations made before or after Employee is hired do not alter this Agreement.
Entire Agreement. This Agreement supersedes any and all prior agreements regarding
arbitration, including, but not limited to, any arbitration provisions in employment
applications. 15
MY SIGNATURE ATTESTS TO THE FACT THAT I HAVE READ, UNDERSTAND, AND AGREE TO BE
LEGALLY BOUND BY ALL OF THE ABOVE TERMS. I FURTHER UNDERSTAND THAT THIS
AGREEMENT REQUIRES ME TO ARBITRATE ANY AND ALL DISPUTES THAT ARISE OUT OF MY
EMPLOYMENT; EXCEPT AS EXPRESSLY PROVIDED OTHERWISE HEREIN.20
(Jt. Exh. 1 at Exh. 6, emphasis in original.) CMC has maintained the Agreement since August
2013. (Jt. Exh. 1 ¶ 7.)
The employees at AutoNation’s California subsidiaries received the following 25
memorandum with the Agreement:
For over a decade, AutoNation has maintained a successful Employee Arbitration
Program at all AutoNation dealerships and other entities. The Company developed this
program to promote a simpler, friendlier, less-costly system of alternative dispute 30
resolution to resolve disputes between the Company and our Associates that may arise
out of the employment relationship. As part of this program, revisions are made to our
arbitration agreements from time to time.
Enclosed is the most recent update to the California Arbitration Agreement (in both 35
English and Spanish versions) which is being distributed to all AutoNation Associates in
California.
 Please review the Agreement and direct any questions to your Region Human
Resources Representative for your location. Your General Manager or 40
Department Head can provide contact information if needed. It is your decision
whether to sign the Agreement.
 Signed Arbitration Agreements (English or Spanish version) should be returned to
your dealership’s Department Head (or Stand-Alone Collision Manager as 45
JD(SF)-13-16
9
applicable). Please be sure to also print your name and date the Agreement as
indicated.
Signed Arbitration Agreements should be returned by no later than April 29, 2013. Your
dealership will follow up directly in approximately one week to ensure that you received 5
this communication.
(GC Exh. 6.)
Since August 25, 2013, certain indirectly-owned dealerships of Respondent AutoNation 10
have utilized identical versions of the Agreement. Edmunds' signature, on behalf of the
“Company”, appears on those Agreements as well. (Jt. Exh. 1 at Exh. 7.) At least one current
employee from each indirectly owned subsidiary dealership of Respondent AutoNation has
signed the Agreement or a similar Agreement that contains provisions requiring employees to
resolve certain employment-related disputes exclusively through individual arbitration 15
proceedings and to relinquish any right they have to resolve disputes through collective or class
action.8 (Jt. Exh. 1 ¶ 9.)
B. Charging Party’s Actions and Litigation
20
Applebaum received the Agreement at work in May 2013. He did not understand it, so
he did not immediately sign it. According to Applebaum, the same afternoon he received the
Agreement, Duport called him, asked why he had not signed the Agreement, and told him he
needed to sign it to keep his job. Applebaum said he wanted to have his family attorney review
it. He took the Agreement home and transmitted it for review by his attorney. Before his25
attorney could review the Agreement, Duport told Applebaum that he was getting pressure from
“corporate” to sign the Agreement and he needed to sign it immediately if he wanted to remain
gainfully employed. (Jt. Exh. 1 at Exhs. 6, 7.) Duport denies making the statements Applebaum
attributes to him. (Jt. Exh. 2 ¶ 7.)
30
Applebaum signed the Agreement on May 6, 2013. An image of Edmunds’ signature is
also on the Agreement for the “Company.” (Jt. Exh. 1 at Exh. 9.)
CMC terminated Applebaum’s employment in June 2013.9 On October 31, 2013,
Applebaum filed a class action complaint in the Orange County Superior Court of the State of 35
California against AutoNation and CMC, alleging wage-and-hour and other violations on the
part of CMC and AutoNation under state law. (Jt. Exh. 1 at Exh. 10.) On December 11,
attorneys for AutoNation and CMC removed Applebaum’s complaint to the U.S. District Court
for the Central District of California, Case 8: 13-cv-0 1927-JVS-RNB. (Jt. Exh. 1 at Exh. 11.)
On January 29, 2014, AutoNation and CMC jointly filed a motion to compel arbitration of 40
Applebaum’s claims. (Jt. Exh. 1 at Exh. 12.) The parties filed various ensuing motions
culminating in an April 8, 2014, order from Judge James V. Selna granting the Respondents’
motion to compel. (Jt. Exh. 1 at Exhs. 13–17.) On January 28, 2015, Applebaum voluntarily

8 Signed agreements were retained at the National Payroll Center, a third-party vendor service. The
physical location for storing the agreements is not material.
9 AutoNation had no involvement with Applebaum’s termination.
JD(SF)-13-16
10
dismissed his lawsuit following settlement of his claims against the Respondents. (Jt. Exh. 1 at
Exh. 18.)
IV. DECISION AND ANALYSIS
5
A. The Agreements’ Prohibition on Class and Collective Legal Claims
Complaint paragraphs 7 and 8 allege that the Respondents have violated the Act by
maintaining the Agreements, which require employees to waive their right to resolution of
employment-related disputes by collective or class action, in violation of Section 8(a)(1) of the 10
Act.
Under Section 8(a)(1), it is an unfair labor practice for an employer to interfere with,
restrain, or coerce employees in the exercise of the rights guaranteed by Section 7 of the Act.
The rights Section 7 guarantee include the right “to form, join or assist labor organizations, to 15
bargain collectively through representatives of their own choosing, and to engage in other
concerted activities for the purpose of collective bargaining or other mutual aid or protection . .
.”
As a threshold issue, I must determine whether AutoNation directly participated in 20
maintaining the Agreements. I find that Edmunds’ signature on the Agreements on the
Respondents’ behalf demonstrates that AutoNation directly participated in effectuating and
maintaining the Agreements. No other manager or supervisor for any of the subsidiaries is
signatory to the Agreements.10 In addition, subsidiary entities wholly owned by AutoNation
rolled out the Agreements, oversaw their implementation, and maintained them as work rules.11 25
Accordingly, I find AutoNation may be held liable if the Agreements violate the Act. Esmark
Inc., supra; Smithfield Foods, supra.
When evaluating whether a rule, including an arbitration agreement, violates Section
8(a)(1), the Board applies the test set forth in Lutheran Heritage Village-Livonia, 343 NLRB 646 30
(2004). See U-Haul Co. of California, 347 NLRB 375, 377 (2006), enfd. 255 Fed.Appx. 527
(D.C. Cir. 2007); D. R. Horton, supra. 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 the following: (1) employees would
reasonably construe the language to prohibit Section 7 activity; (2) the rule was promulgated in 35
response to union activity; or (3) the rule has been applied to restrict the exercise of Section 7
rights.” Lutheran Heritage at 647.
Because the Agreements explicitly prohibit employees from pursuing employment-
related claims on a class or collective basis, I find they violate Section 8(a)(1). The right to 40
pursue concerted legal action, including class complaints, addressing wages, hours, and working

10 It would follow that if Edmunds’ signature does bind employees of the subsidiaries to the
agreement, and AutoNation must have participated in maintaining and enforcing the Agreements;
otherwise nobody signed the Agreements on behalf of Costa Mesa Cars or the other subsidiaries.
11 The Respondents assert that there was not centralized control over labor relations, interrelation of
operations, or common management, ownership, or financial control. These factors, however, go toward
single employer status, which is not alleged in the complaint.
JD(SF)-13-16
11
conditions falls within Section 7’s protections. See, e.g., Murphy Oil USA, Inc., supra; D. R.
Horton, supra;12 see also Eastex, Inc. v. NLRB, 437 U.S. 556, 566 (1978)(Section 7 protects
employee efforts seeking “to improve working conditions through resort to administrative and
judicial forums”); Spandsco Oil & Royalty Co., 42 NLRB 942, 948-949 (1942); Salt River Valley
Water Users Assn., 99 NLRB 849, 853-854 (1952), enfd. 206 F.2d 325 (9th Cir. 1953); Brady v. 5
National Football League, 644 F.3d 661, 673 (8th Cir. 2011) (“lawsuit filed in good faith by a
group of employees to achieve more favorable terms or conditions of employment is ‘concerted
activity’ under §7 of the National Labor Relations Act.”); Trinity Trucking & Materials Corp. v.
NLRB, 567 F.2d 391 (7th Cir. 1977) (mem. disp.), cert. denied, 438 U.S. 914 (1978).
Accordingly, an employer rule or policy that interferes with such actions violates Section 8(a)(1).10
D. R. Horton, supra.; Murphy Oil, supra; See also, e.g., Chesapeake Energy Corp., 362 NLRB
No. 80 (2015); Cellular Sales of Missouri, 362 NLRB No. 27 (2015); The Neiman Marcus
Group, Inc., 362 NLRB No. 157 (2015); Countrywide Financial Corp., 362 NLRB No. 165
(2015); Leslie’s Pool Mart, Inc., 362 NLRB No. 184 (2015).
15
The Respondents assert that as the lone named putative class member, Applebaum, was
not engaged in concerted activity. Established caselaw instructs otherwise. Whether or not there
were named plaintiffs other than Applebaum is immaterial since the Act “protects employees
who engage in individual action . . . with the objective of initiating or inducing group action.”
Mushroom Transportation Co. v. NLRB, 330 F.2d. 683, 685 (3d Cir. 1964). Applebaum’s class 20
action lawsuit sought to “enlist the support of fellow employees in mutual aid and protection”
and intended to “initiat[e] or induc[e] group action” regarding alleged wage-and-hour violations
against the Respondents. Whitaker Corp., 289 NLRB 933 (1988). “Clearly, an individual who
files a class or collective action regarding wages, hours or working conditions, whether in court
or before an arbitrator, seeks to initiate or induce group action and is engaged in conduct 25
protected by Section 7.” D.R. Horton, supra, slip op. at 313; see also The Neiman Marcus Group,
Inc., 362 NLRB No. 157 (2015). I therefore find Applebaum was engaged in protected
concerted activity when he filed and pursued his class action suit.
The Respondents further assert that the Agreements are voluntary. Even assuming 30
Duport did not tell Applebaum he would be terminated if he did not sign the Agreement, I still
find the Agreements were coercive. The instructions to AutoNation’s general managers and
department heads plainly require management or regional human resources to follow up
individually and in-person with employees who do not return a signed Agreement within a
week’s time. This requires management to track who returns the Agreements. It further subjects 35
employees who choose to protect their Section 7 right to engage in class or collective litigation
by not signing the Agreement to a one-on-one, in-person follow-up discussion with management.
Finally, even if the Agreements are voluntary, they constitute an impermissible prospective
waiver of Section 7 rights. On Assignment Staffing Services, 362 NLRB No. 189, slip op. at 1, 4–
5 (2015).40

12 The Board in Murphy Oil reexamined D. R. Horton, and determined that its reasoning and results
were correct.
13 At footnote 5 in D.R. Horton, the Board, citing to court decisions, notes, “Employees surely
understand what several Federal courts have recognized: that named plaintiffs run a greater risk of
suffering unlawful retaliation than unnamed class members.” As such, the Board observed that “in a quite
literal sense, named-employee-plaintiffs protect the unnamed class members.”
JD(SF)-13-16
12
Consistent with the Board’s precedent, I find the General Counsel has met his burden to
prove the Respondents violated the Act as alleged in complaint paragraphs 7 and 8.
B. Enforcement of the Agreement
5
Complaint paragraph 9 alleges that the Respondents violated Section 8(a)(1) of the Act
by enforcing Applebaum’s Agreement as detailed above.
As a threshold issue, I find that AutoNation directly participated in enforcing the
Agreement. The record, detailed above, is clear that attorneys for AutoNation and CMC jointly 10
sought removal of Applebaum’s lawsuit to federal court, jointly filed the motion to compel
arbitration, and participated in the ensuing litigation resulting in that motion’s success.
It is well settled that an employer violates Section 8(a)(1) by enforcing a rule that
unlawfully restricts Section 7 rights. See, e.g., NLRB v. Washington Aluminum Co., 370 U.S. 9, 15
16-17 (1962); Republic Aviation Corp. v. NLRB, 324 U.S. 793 (1945). Here, it is undisputed that
the Respondents enforced the Agreement by filing a motion to compel individual arbitration and
related documents in Applebaum’s wage-and-hour lawsuit. (Jt. Exh. 1 ¶ 14, 16, 18.)
C. Affirmative Defenses20
The Respondents contend that Applebaum’s complaint is time-barred because “Plaintiff
failed to file his complaint within six months of filing his charge with the Board.” (R Br. p. 20.)
This misconstrues Section 10(b) of the Act, which provides that “no complaint shall issue based
upon any unfair labor practice occurring more than six months prior to the filing of the charge 25
with the Board.” Clearly, the Agreement was maintained and enforced within 6 months of the
charge and the amended charge. See PJ Cheese, Inc., 362 NLRB No. 177, slip op. at 1 (2015).
Accordingly, any statute of limitations argument fails.
The Respondents further asserts that the Board acted improperly by failing to give notice 30
prior to revoking Memorandum GC10-06 and by adopting a new rule without soliciting public
comments.14 This affirmative defense was not asserted in the answer, and appears for the first
time in the Respondents’ post-hearing brief. Even considering it on its merits, however, the
Respondents’ contention fails. General Counsel Memoranda are not considered binding
authority, and they do not constitute Board procedure. My decision is based on Board and 35
Supreme Court caselaw, which of course is not governed by the General Counsel’s position in
any manner.

14 The Respondents assert other affirmative defenses in the answer to the complaint, but did not argue
any of them at the hearing or in closing briefs.
JD(SF)-13-16
13
V. CONCLUSIONS OF LAW
(1) Respondent Costa Mesa Cars, Inc., is an employer within the meaning of Section
2(6) and (7) of the Act and Respondent AutoNation, Inc., is a holding company and CMC’s
parent company.5
(2) The Respondents violated Section 8(a)(1) of the Act by maintaining and enforcing
arbitration agreements requiring all employment-related disputes to be submitted to individual
binding arbitration.
10
(3) The Respondents violated Section 8(a)(1) of the Act by asserting the arbitration
agreement in litigation the Charging Party brought against the Respondent in order to prevail on
a motion to compel arbitration.
(4) Respondent AutoNation is liable for violating Section 8(a)(1) of the Act because it 15
was a direct participant with its subsidiary CMC and other subsidiary dealerships in maintaining
and enforcing the arbitration agreements.
REMEDY
20
Having found that the Respondents have engaged in certain unfair labor practices, I shall
order them to cease and desist therefrom and to take certain affirmative action designed to
effectuate the policies of the Act.
As I have concluded that the arbitration agreements are unlawful, the recommended order 25
requires that the Respondents revise or rescind them in all of forms to make clear to employees
that the arbitration agreements do not constitute a waiver of their right to maintain employment-
related joint, class, or collective actions in all forums. The Respondents shall notify all current
and former employees who were required to sign the arbitration agreements in any form that they
have been rescinded or revised and, if revised, provide them a copy of the revised agreement. 30
Because the Respondents utilized the arbitration agreements on a corporate-wide basis, the
Respondents shall post a notice at all locations where the arbitration agreements, or any portion
of them requiring all employment-related disputes to be submitted to individual binding
arbitration, was in effect. See, e.g., U-Haul Co. of California, supra, fn. 2 (2006); D. R. Horton,
supra, slip op. at 17; Murphy Oil, supra.35
I recommend the Respondents be required to reimburse Applebaum for any litigation and
related expenses, with interest, to date and in the future, directly related to the Company’s filing
its motion to compel arbitration in Applebaum v. AutoNation, Inc. and Costa Mesa Cars, Inc.,
Case 8: 13-cv-0 1927-JVS-RNB. 15 Determining the applicable rate of interest on the 40
reimbursement will be as outlined in New Horizons, 283 NLRB 1173 (1987), (adopting the
Internal Revenue Service rate for underpayment of Federal taxes). Interest on all amounts shall
be computed on a daily basis as prescribed in Kentucky River Medical Center, 356 NLRB 6
(2010).

15 Any extent to which litigation expenses were resolved by the settlement agreement between the
parties shall be determined in the compliance stage.
JD(SF)-13-16
14
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended16
ORDER5
The Respondents, Costa Mesa Cars, Inc., Costa Mesa, California, and AutoNation, Inc.
(AutoNation) a Delaware corporation with headquarter offices located in Fort Lauderdale,
Florida, their officers, agents, successors, and assigns, shall
10
1. Cease and desist from:
(a) Maintaining and/or enforcing arbitration agreements that seek to have employees
waive the right to maintain class or collective actions regarding employment-related disputes in
all forums, whether arbitral or judicial.15
(b) 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.
2. Take the following affirmative action necessary to effectuate the policies of the Act:20
(a) Rescind the arbitration agreements in all forms, or revise them in all forms to make
clear to employees that the arbitration agreements do not constitute a waiver of their right to
maintain employment-related joint, class, or collective actions in all forums.
25
(b) Notify all current and former employees who signed the arbitration agreements in any
form that they have been rescinded or revised and, if revised, provide them a copy of the revised
agreement(s).
(c) In the manner set forth in this decision, reimburse the Charging Party for any 30
reasonable attorneys' fees and litigation expenses that he may have incurred in opposing the
Respondents’ motion to dismiss his claims and compel individual arbitration in Applebaum v.
AutoNation, Inc. and Costa Mesa Cars, Inc., Case 8: 13-cv-0 1927-JVS-RNB.
(d) Within 14 days after service by the Region, post at all facilities where it has 35
maintained the arbitration agreements the attached notice marked “Appendix. ”17 Copies of the
notice, on forms provided by the Regional Director for Region 21, after being signed by the
Respondents’ authorized representative, shall be posted by the Respondents 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 40

16 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.
17 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.”
distributed electronically, such as by email, posting on an intranet or an internet site,
electronic means, if the Respondent
means. Reasonable steps shall be taken by the Respondent
altered, defaced, or covered by any other material. In the e
proceedings, a Respondent has gone out of business or closed 5
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
August 25, 2013.
(e) Within 21 days after service by the Region, file with the Regional Director a sworn 10
certification of a responsible official on a form provided by the Region attesting to t
the Respondents have taken to comply.
Dated, Washington, D.C. March 14, 201615
20
JD(SF)
15
s customarily communicates with its employees by such
s to ensure that the notices are not
vent that, during the pendency of these
any facility involved in these
____________________
Eleanor Laws
Administrative Law Judge
-13-16
and/or other
he steps that
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 and/or enforce arbitration agreements that seek to have employees
waive the right to maintain class or collective actions regarding employment-related disputes in
all forums, whether arbitral or judicial.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce our employees
in the exercise of the rights listed above.
WE WILL rescind the arbitration agreements in all forms, or revise them in all forms, to make
clear that the arbitration agreements do not constitute a waiver of your right to maintain
employment-related joint, class, or collective actions in all forums.
WE WILL notify all current and former employees who signed an arbitration agreement in any
of its forms that the arbitration agreement has been rescinded or revised and, if revised, we will
provide them a copy of the revised agreement(s).
COSTA MESA CARS, INC.; d/b/a
AUTONATION HONDA COSTA MESA; f/k/a
POWER HONDA COSTA MESA and
AUTONATION, INC.
(Employer)
Dated By
(Representative) (Title)
JD(SF)-13-16
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-123072 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.
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.