Johnmmohammadi v. Bloomingdale’s Case Analysis

Neither the Norris-LaGuardia Act nor National Labor Relations Act Protect Employees Who Make A Free and Informed Decision to Waive the Right to Bring a Class Action

A recent case has confirmed that employees, who make the voluntary and informed choice not to opt-out of arbitration agreements, cannot then claim that their employer has coerced them into waiving their class action rights. In the case of Johnmohammadi v. Bloomingdale’s, Inc., 755 F.3d 1072 (9th Cir. 2014), the Ninth Circuit, applying California Law, ruled that an employee who freely decides to arbitrate employment-related disputes, cannot then claim that the Norris-LaGuardia Act or the National Labor Relations Act invalidates the arbitration agreement. The court considered the validity of the arbitration agreement under the Federal Arbitration Act (“FAA”). The court ultimately decided that the Defendant-Appellee, Bloomingdale’s, had given the Plaintiff-Appellant two options, and did not coerce her into choosing arbitration, which meant that the Plaintiff-Appellant could not then claim that Bloomingdale’s forced her into arbitration.

Factual Basis of the Case

The Plaintiff-Appellant, Fatemeh Johnmohammadi, was a sales associate at Defendant-Appellee, Bloomingdale’s. When the Plaintiff-Appellant began working at Bloomingdale’s, the company gave her a set of documents that described its dispute resolution program. The set of documents informed the Plaintiff-Appellant that, unless she returned the enclosed opt-out form within 30 days, she agreed to resolve any and all subsequent employment related disputes through arbitration. The Plaintiff-Appellant did not return the opt-out form, which means that she was bound by the terms of the arbitration agreement.

The relevant portion of the arbitration agreement forbids class-action arbitration and warns that employees, who fail to opt-out of arbitration, as the Plaintiff-Appellant did, waive the right to pursue collective claims, such as a class action. Instead, employees who do not opt-out agree to individually arbitrate any subsequent employment related claims. The Plaintiff-Appellant subsequently filed a class action suit, seeking to recover unpaid overtime wages. After the case was removed to federal court, Defendant-Appellee, Bloomingdale’s, moved to compel arbitration under the Federal Arbitration Act (“FAA”), and sought a stay of the Plaintiff-Appellant’s suit pending the arbitration. The district court granted the motion to compel, finding that the Plaintiff-Appellee had entered into a valid arbitration agreement. The Plaintiff-Appellee then appealed.

The Appeal

On appeal, the Plaintiff-Appellant relied on two federal statutes to argue that Bloomingdale’s arbitration waiver was unenforceable. The first statute, Norris-LaGuardia Act, (“NLA”) 29 U.S.C. § 101 et. seq., provides that employees shall be free from employer interference in, among other things, concerted activities for the purpose of collective bargaining or other mutual aid or protection. The second statute, the National Labor Relations Act (“NRLA”), 29 U.S.C. § 151 et seq., is similar. The NLRA states that employees have the right “to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection.” The Plaintiff-Appellant argued that the NLA and the NLRA protects her right to file the instant class action on behalf of her fellow employees.

The court’s threshold inquiry was whether or not Bloomingdale’s interfered with or coerced the Plaintiff-Appellant into waiving her right to pursue a class action. The court found that Bloomingdale’s did not, in fact, coerce the Plaintiff-Appellant. Bloomingdale’s, for instance, did not require the Plaintiff-Appellant to accept a class action waiver as a condition of her employment and fully informed her of the consequences of failing to opt out. Unlike other cases, Bloomingdale’s did not threaten the Plaintiff-Appellant with negative consequences if she decided to opt-out of arbitration. Further, Bloomingdale’s offered the Plaintiff-Appellant a choice to opt-in or out. Because there is no coercion, the court did not find that Bloomingdale’s interfered with any of the rights protected by the NLA and NLRA. The Ninth Circuit thus found that the Plaintiff-Appellant made a free and informed choice to waive her rights to bring a class action claim. The court therefore applied the FAA and found that the Plaintiff-Appellant and Bloomingdale’s had a valid arbitration agreement. The court therefore affirmed the district court’s decision holding that the arbitration agreement was valid.

Johnmohammadi’s Impact

This case has important and practical implications for both employers and employees. This case shows that employers, who provide full information, options, and free choice to employees, may be able to avoid litigation. This case is also instructive for employees, who need to pay attention to any materials regarding arbitration. Employees should carefully consider their options and assume that a court will hold them to their choice. If you have a wage or hour dispute, contact the employment attorneys at Nassiri Law Group, practicing in Orange County, Riverside, and Los Angeles. Call 714-937-2020.