CPS Security Solutions, Inc. d/b/a CPS Security (USA), Inc., CPS Construction Security Plus, Inc., a

National Labor Relations Board - Administrative Judge Opinions

Feb 11, 2014

28-CA-072150 (N.L.R.B. Feb. 11, 2014)

JD(ATL)–04–14
Las Vegas, NV
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA OFFICE
CPS SECURITY (USA), INC.,
a wholly owned subsidiary of
CPS SECURITY SOLUTIONS, INC.1
and Case 28–CA–072150
DENNIS TALLMAN, an Individual
and Case 28–CA–075432
DONALD MIKA, an Individual
and Case 28–CA–075450
BERYL HARTER, an Individual
Larry A. Smith, Esq., and Nathan A. Higley, Esq.,
for the Acting General Counsel.
Howard M. Knee, Esq., for the Respondent.
DECISION
STATEMENT OF THE CASE
MICHAEL A. MARCIONESE, Administrative Law Judge. I heard this case in Las
Vegas, Nevada, on May 21 and 22, 2013. Dennis Tallman filed the charge in Case 28–CA–
072150 on January 9, 2012.2 Donald Mika and Beryl Harter filed the charges in Case 28–CA–
075432 and 28–CA–075450, respectively, on January 24. All three Charging Parties amended
their respective charges on December 18. Based upon these charges, as amended, the Acting
General Counsel issued the consolidated complaint on December 27.

1 The name of the Respondent has been corrected to reflect a stipulation by the parties as to the correct
identity of the Respondent. Based on that stipulation, counsel for the General Counsel withdrew complaint
allegations against two other named Respondents. In formulating the caption, I agree with counsel for the
Respondent that the relationship between CPS and CPS Security Solutions is not a “d/b/a” as counsel for
the Acting General Counsel claimed.
2 All dates are in 2012 unless otherwise indicated.
JD(ATL)–04–14
2
The consolidated complaint, as amended, alleges, inter alia, that CPS Security (USA),
Inc. (the Respondent) violated Section 8(a)(1) of the Act by maintaining and enforcing
arbitration agreements that unlawfully waived employees’ Section 7 right to pursue collective
and /or class action litigation in any forum. The consolidated complaint further alleges that the 5
Respondent violated the Act when it sought to enforce the allegedly unlawful arbitration
agreements by filing and prosecuting motions to compel arbitration in lawsuits filed by the three
individual Charging Parties in State and Federal court.
On January 9, 2013, the Respondent filed its answer denying the unfair labor practice 10
allegations of the complaint and asserting several affirmative defenses. Among others, the
Respondent asserted that the complaint’s allegations were barred by Section 10(b) of the Act,
that the arbitration agreements were voluntarily executed by the Charging Parties, and that the
Respondent never sought to compel arbitration of any collective actions filed by the Charging
Parties or any other employee. 15
The issues raised by the pleadings in this case are governed by the Board’s decision in
D.R. Horton, Inc., 357 NLRB No. 184 (2012), enf. denied in D.R. Horton v. NLRB, 2013WL
6231617 (5th Cir. 2013 No. 12-60031). On the entire record, including my observation of the
demeanor of the witnesses, and after considering the briefs filed by the Acting General Counsel 20
and the Respondent, I make the following
FINDINGS OF FACT
I. JURISDICTION25
CPS Security Solutions, Inc. is a Delaware corporation with its principal office located in
Gardena, California. Its subsidiary, the Respondent CPS Security (USA), Inc., is a Nevada
corporation whose principal office is located at the same address in Gardena, California. The
Respondent provides security services at locations in Nevada and in other States of the United 30
States and operates branch offices in several States, including Nevada. There is no dispute that
the Respondent annually performs services valued in excess of $50,000 in States outside the
State of California. The 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.
35
II. ALLEGED UNFAIR LABOR PRACTICES
A. Facts
Most of the facts relevant to deciding the issue in this case are undisputed. The 40
Respondent CPS provides security guard services for construction companies at construction
sites in Nevada and several other States. While it shares a home office in Gardena, California,
with its parent company, it operates a branch office in Henderson, Nevada, where it manages the
services provided in Nevada, the site of the instant dispute. Christopher Coffey is Respondent’s
chief executive officer, a position he holds with the parent company as well. He testified at the 45
hearing and acknowledged that he is responsible for setting corporate policy, including the
human resources policies at issue here. Jim Newman is Respondent’s General Counsel. He also
JD(ATL)–04–14
3
testified at the hearing and admitted that he drafted one of the two arbitration agreements in
dispute.
The Respondent employs hourly guards and “trailer guards” to provide security at
construction sites. A “trailer guard” is required to reside onsite in a stationary trailer provided by 5
the Respondent. They are scheduled to be onsite 24 hours a day on the weekends and 16 hours a
day during the week. Their regular “work” schedule requires them to patrol the site when no one
else is around, i.e., from 5 to 7 a. m. and 3 to 9 p.m. Monday through Friday and from 5 .a. m to
9 p. m. on weekends. The period from 9 p. m. to 5a. m. is designated as “personal time”, when
the trailer guard must remain in the trailer and is essentially on-call to respond to alarms and 10
monitor access to the site. During this “personal time,” the trailer guards are only compensated
for time spent responding to an alarm or other interruption. The only time the guards are
permitted to leave the construction site is Monday through Friday from 7 a. m. until 5 p. m. when
construction workers are typically onsite. The trailer guards typically are paid minimum wage.
15
The three Charging Parties in this case all worked as trailer guards in Nevada. Tallman
was hired July 23, 2007, and worked until September or October 2008. Mika was employed from
March 2008 until March 2011 and Harter was hired on or about June 12, 2006.3 Although Harter
is no longer employed by the Respondent, there is no evidence in the record showing when her
employment ended. On April 30, 2009, Tallman filed in a Nevada State court a hybrid class 20
action and collective action lawsuit against the Respondent for a violation of the Federal Fair
Labor Standards Act (FLSA) and Nevada State wage and hour laws. In both the Federal and
State law actions, Tallman sought compensation for the “personal time” spent in his trailer from
9 p. m. to 5 a. m. On May 27, 2009, the Respondent petitioned to remove Tallman’s actions from
State to Federal court based on the Federal FLSA claim. On or about March 22, 2011, the federal 25
judge declined to assert supplemental jurisdiction over Tallman’s State law claims and severed
and remanded those to Nevada State court. On May 18, 2011, the Respondent filed its motion to
compel arbitration of Tallman’s State law claims on an individual basis. On October 4, 2011, the
State court judge granted the Respondent’s motion. The Respondent has not sought to compel
arbitration of Tallman’s Federal FLSA collective action and that case has progressed to trial. 30
Although the trial commenced on December 11, 2012, it has not concluded.4 Mika is an opt-in
plaintiff in Tallman’s ongoing federal lawsuit.
Mika and Harter filed their own class action lawsuit against the Respondent in Nevada
State court on January 23, 2012. The Respondent filed a motion to consolidate this action with 35
Tallman’s State court litigation and to compel arbitration of their claims on an individual basis
and the court granted the motion on June 18, 2012. Harter also filed a collective FLSA action in
Federal court in 2012. As with Tallman’s Federal court litigation, the Respondent has not sought
to compel arbitration of this collective action. Harter’s case is proceeding with no trial scheduled
as of the hearing in this matter.40

3 Only Tallman and Mika testified at the hearing. Harter did not appear at the hearing. Counsel for the Acting
General Counsel represented that she had moved and he did not have a current address for her although he
had communicated with her telephonically. Counsel represented further that she had told him she had some
kind of medical issue but no evidence documenting a physical inability to appear and testify was offered.
4 The Federal court declared a mistrial in that case and, at the time of the hearing here, it was scheduled for
retrial commencing August 20, 2013.
JD(ATL)–04–14
4
The Respondent’s motions to compel arbitration of the State court lawsuits filed by
Tallman, Mika, and Harter were based on documents each had signed while employed by the
Respondent. The document, entitled, “Offer to Participate in Arbitration of Disputes” provides,
in pertinent part:
5
I, [employee name], recognize that differences may arise between [the
Respondent] and me during or following my employment with the Company
related to my employment, my compensation, and/or my working conditions. I
have been offered the opportunity to participate in a mandatory arbitration
procedure which has certain advantages and disadvantages and I have decided 10
that the advantages outweigh the disadvantages. I understand that my election to
participate in this process is not a condition of my employment and I acknowledge
that by agreeing to arbitration, I may gain the benefits of a speedy, impartial
dispute resolution procedure, with the administrative costs of arbitration and the
professional fees of the arbitrator paid by the Company regardless of the outcome. 15
I understand and agree that I am giving up rights I may otherwise have: (1) to
have claims subject to this Mutual Agreement to Arbitrate Claims (“Agreement”)
tried in a court of law before a judge or a jury; and (2) to initiate or to participate
in representative actions, collective actions, and/or class actions.
20
MUTUAL AGREEMENT TO ARBITRATE CLAIMS
1. Claims Covered by the Agreement
The Company and I mutually consent to the resolution by arbitration of all 25
claims or controversies (“Claims”) that the Company may have against me or that
I may have against the Company (or against its officers, directors, managers,
employees or agents). Except for the claims specifically excluded in Paragraph 2
below, this Agreement shall govern all claims for : (a) breach of any contract or
covenant (express or implied); (b) torts; (c) discrimination (including, but not 30
limited to, race, sex, religion, national origin, age, marital status, sexual
orientation, or medical condition, handicap or disability); (d) harassment; (e)
retaliation; (f) benefits (except where an employee benefit or pension plan
specifies that its claims procedure shall include an arbitration procedure different
from this one); and (g) violation of any federal, state, or any governmental law, 35
statute, regulation, or ordinance, except those listed in Paragraph 2 below. Any
and all employment related claims shall be exclusively subject to the provisions of
this Agreement, including (by way of example rather than limitation) those
pertaining to the following subjects: recruitment, selection or non-selection,
hiring, promotion, demotion, performance appraisals, working conditions, 40
termination of employment, payment or non-payment of compensation, wages,
overtime, commissions, bonuses, non-wage payments, penalties, reimbursements,
benefits, and/or severance.
JD(ATL)–04–14
5
2. Claims Not Covered by the Agreement
Claims for Workers’ Compensation and claims for Unemployment Insurance
Benefits are not covered by this Agreement.
5
. . . .
6. Waiver of Right to Initiate or Participate in Collective or Class Actions
The Arbitrator shall not consolidate Claims of different employees into 10
one proceeding, nor shall the Arbitrator have the power to hear arbitration as a
class action.
By entering into this Agreement, the Company and I are agreeing to waive
rights we might otherwise have including, but not limited to, the rights (a) to
initiate representative actions, collective actions, and/or class actions; and (b) to 15
participate in representative actions, collective actions, or class actions initiated
by others.
7. No Waiver Implied by Responding to Administrative Claims
20
In the event that I violate this Agreement by filing an administrative action
or claim with a federal, state or municipal agency (including but not limited to
administrative claims for alleged discrimination, unpaid wages and/or penalties,
or unsafe working conditions), the Company may elect to participate in the
administrative process without being deemed to have waived the provisions of 25
this Agreement and may assert this Agreement as a defense to the administrative
action and/or as a defense to any lawsuit, whether preceding, following, arising
from, or otherwise related in any way to such administrative action or claim.
(Emphasis added.)
30
This document is eight pages long and contains 18 sections in all. The last page, after the
signature page of the Agreement, contains the following three paragraphs, all capitalized and in
bold type, which is also signed and dated by the employee:
VOLUNTARY AGREEMENT35
I ACKNOWLEDGE THAT I HAVE CAREFULLY READ THIS
AGREEMENT, THAT I UNDERSTAND ITS TERMS, THAT ALL
UNDERSTANDINGS AND AGREEMENTS BETWEEN THE COMPANY
AND ME RELATING TO THE SUBJECTS COVERED IN THIS 40
AGREEMENT ARE CONTAINED IN IT, AND THAT I HAVE ENTERED
INTO THIS AGREEMENT FREELY AND VOLUNTARILY AND NOT IN
RELIANCE UPON ANY PROMISES OR REPRESENTATIONS BY THE
COMPANY OTHER THAN THOSE CONTAINED IN THIS AGREEMENT
ITSELF45
RIGHT TO CONSULT COUNSEL
JD(ATL)–04–14
6
I FURTHER ACKNOWLEDGE THAT I HAVE BEEN GIVEN THE
OPPORTUNITY TO DISCUSS THIS AGREEMENT WITH ADVISORS OF
MY CHOICE AND THAT I HAVE AVAILED MYSELF OF THAT
OPPORTUNITY TO THE EXTENT THAT I WISH TO DO SO.5
30 DAY PERIOD TO OPT-OUT
I FURTHER ACKNOWLEDGE THAT I WAS ADVISED THAT
CHOOSING TO SIGN THIS AGREEMENT IS NOT A CONDITION OF MY 10
EMPLOYMENT. I HAVE BEEN GIVEN A COPY OF MY SIGNED
AGREEMENT AND HAVE A FULL THIRTY (30) DAY PERIOD TO OPT-
OUT OF THE AGREEMENT IF I CHANGE MY MIND. IN THE EVENT
THAT I DECIDE THAT ARBITRATION IS NOT RIGHT FOR ME, I WILL
MAIL WRITTEN NOTICE TO THE COMPANY BY CERTIFIED OR 15
REGISTERED MAIL (AS SET FORTH IN PARAGRAPH 3) WITHIN 30
DAYS.
The documents in evidence signed by the Charging Parties all bear a notation indicating
that the form was revised in May 2006. Tallman signed his “Offer to Participate” and arbitration 20
agreement on his first day of employment, i.e., July 23, 2007. Mika also signed his on his first
day, i.e., March 24, 2008. Harter, who as noted above started in June 2006, did not sign this
document until March 9, 2007.
In addition to the above document, each of the Charging Parties signed a much shorter 25
document entitled, “Arbitration Agreement (Outside CA)”. All three signed on their first date of
employment, i.e., Harter on June 12, 2006, Tallman on July 23, 2007, and Mika on March 24,
2008. This document reads as follows:
Any controversy, dispute or claim (“Claim”) whatsoever between __________ 30
(“EMPLOYEE”) on the one hand, and CPS Security (USA), Inc. (COMPANY”),
or any of its employees, officers, and agents (collectively “COMPANY
PARTIES”) on the other hand, shall be settled by binding arbitration, at the
request of either party, provided that this Arbitration Agreement shall not apply to
claims that EMPLOYEE has violated statutory or contractual prohibiting 35
solicitation, of the COMPANY’S customers or employees and/or prohibiting the
misappropriation, use or disclosure of the COMPANY’s confidential information.
The parties shall agree on an arbitrator affiliated with a recognized alternative
dispute organization and, if no agreement is reached, either party may petition any
court having proper jurisdiction. The claims covered by this agreement include, 40
but are not limited to, claims for wages and other compensation, claims for breach
of contract (express or implied), tort claims, claims for discrimination (including,
but not limited to, race, sex, sexual orientation, religion, national origin, age,
marital status, medical condition, and disability), harassment (including, but not
limited to race, sex, sexual orientation, religion, national origin, age, marital 45
status, medical condition, and disability) and claims for violation of any federal,
state or other government law, statute, regulation, or ordinance, except for claims
JD(ATL)–04–14
7
for workers’ compensation or unemployment insurance benefits. Nothing
contained in this Agreement shall prohibit any current or former employee from
filing a charge of discrimination with the Equal Employment Opportunity
Commission and/or any state agency that investigates claims of discrimination
and harassment, and cooperating with the investigation of such charge.5
The arbitrator shall apply state substantive procedural law to the proceeding. The
demand for arbitration must be in writing and made with the applicable statute of
limitations period. The arbitration shall take place in the County and state in
which the employee provided services to the Company. The parties shall be 10
entitled to conduct reasonable discovery, including conducting depositions and
requesting documents. The arbitrator shall have the authority to resolve discovery
disputes, including but not limited to determining what constitutes reasonable
discovery. The arbitrator shall prepare in writing and provide to the parties a
decision and award which includes factual findings and the reasons upon which 15
the decision is based.
The decision of the arbitrator shall be binding and conclusive on the parties,
except as may otherwise be required by law. Judgment upon the award rendered
by the arbitrator may be entered in any court having proper jurisdiction. The fees 20
for the arbitrator shall be paid by COMPANY. Each party shall bear its or his
own fees and costs incurred in connection with the arbitration except for any
attorneys’ fees or costs which were awarded to a party by the Arbitrator pursuant
to a statute or contract which provides for recovery of such fees and/or costs from
the other party.25
This Arbitration Agreement between EMPLOYEE and COMPANY constitutes
the entire agreement between the parties with respect to the matters referenced
herein. This Agreement can be modified only by a written instrument executed
by EMPLOYEE and Chris Coffey, on behalf of the COMPANY.30
Both the COMPANY and EMPLOYEE understand and agree that by using
arbitration to resolve any Claims between EMPLOYEE and COMPANY or any or
all of the COMPANY PARTIES they are giving up any right that they may have to
a judge or jury with respect to those Claims.35
The copies of this arbitration agreement that are in evidence bear a notation indicating it is the
2005 version of the document.
Newman, the Respondent’s General Counsel, testified that he drafted the “Offer to 40
Participate” in 2006 and that the shorter arbitration agreement was already in existence when he
began working for the Respondent in 2002. According to Newman, it was the Respondent’s
intent that the Offer to Participate would replace the shorter agreement. Although he testified that
new employees no longer sign the short-form arbitration agreement, he was unable to specify
when the Respondent stopped using that version other than that it was sometime after he got 45
involved in Tallman’s lawsuit.
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8
While the “Offer to Participate” signed by the Charging Parties, on its face, states that it
was not a condition of employment, the circumstances surrounding the actual execution of these
agreements, as shown by the credible testimony of Tallman and Mika, suggest otherwise. In
addition, company records including new hire checklists maintained in employee personnel files,
support the General Counsel’s argument that the arbitration agreements utilized by the 5
Respondent were in fact a mandatory term and condition of employment.
Tallman testified that, on his first day of employment, a woman who worked in the office
gave him a 35-page stack of documents to review and sign. At the same time, a drug testing
sponge was inserted in his mouth, where it remained while he reviewed and signed the 10
documents. The maintenance employee who was supposed to drive Tallman to his trailer was
waiting for him outside the office. Tallman testified that he was given about 5-10 minutes to sign
all of the documents and that there was no discussion about any of them. According to Tallman,
he went through the stack of papers and signed anywhere he saw a space for a signature without
reading any of the documents. While he was doing this, the maintenance employee came into the 15
office and asked the woman if Tallman was ready to go. Tallman testified that he felt “hurried.”
After Tallman finished going through all the documents, he was transported to his jobsite to start
work. He was not given a copy of any of the documents he signed. Tallman acknowledged on
cross-examination that no one from the Company told him he could not read the documents and
admitted that he did not ask for more time to do so. Tallman also acknowledged that, in a 20
deposition he gave in connection with his lawsuit, more than 2 years before the hearing here, he
stated that it was his practice in 2007 to read documents before signing them and that he “did not
recall” if he had time to read the documents he was given by the Respondent before signing
them. He did state in the deposition, consistent with his testimony here, that he felt “rushed.”
25
Mika testified that, a few days after he was hired, he went to the Respondent’s office for
an orientation. He recalled that there were about six other people going through orientation at the
same time. After watching a video, getting his uniforms and going over rules and regulations, he
was given a bunch of documents to review and sign. The woman who gave him the documents
then left the room. His new employee packet, which is in evidence, consists of about 38 pages. 30
Mika testified that it took him about 20 minutes to go through all the pages and sign where
indicated. He testified similarly to Tallman that there was no discussion of any of the documents.
Although he testified that he tried to read the documents, including the two arbitration
agreements described above, he did not understand them. He did not ask anyone for an
explanation because no one from the Company was there when he went through the documents.35
According to Mika, after he finished going through and signing the paperwork, he followed the
maintenance man out to the jobsite where his trailer was set up.5
The Respondent did not call any witnesses who were present for the signing of these
documents by any of the Charging Parties or any other employee. The General Counsel did place 40
in evidence the new hire checklist utilized by the Respondent in Nevada which lists all of the
documents contained in the packet, including the above arbitration agreements, and instructs its
office staff how to process the paperwork. These instructions all include some version of the
following:

5 As previously noted, Harter did not appear at the hearing. There is no evidence regarding the circumstances
under which she signed the short-form arbitration agreement when first hired, or the long-form “Offer to
Participate” almost a year later.
JD(ATL)–04–14
9
Please make sure the following documents are all signed and in the new hire
package before sending to corporate . . .
Every document signed.5
Documents often missed are: Arbitration , . .
The parties stipulated that, of 160 personnel files submitted to counsel for the Acting General
Counsel in response to his subpoena duces tecum, only one did not contain a signed arbitration 10
agreement, in either version.
The Respondent’s General Counsel Newman testified that the Respondent has revised its
arbitration agreement since the charges in this case were filed to specifically exclude unfair labor
practice charges from those claims covered by the agreement. According to Newman, the 15
purpose of this revision was to make clear that Respondent did not intend to prohibit employees
from going to the Board. Newman conceded that the Respondent has not started using the new
version in Nevada and that the Respondent has not attempted to replace the existing arbitration
agreements that employees had signed with the new version.
20
B. Analysis
(1) Section 10(b)
The Respondent argued in its brief that the allegations based on Tallman’s charge are 25
barred by Section 10(b) of the Act’s 6 month statute of limitations. The Respondent’s argument
is based on the fact that Tallman’s charge was filed more than 2 years after the Respondent’s
counsel informed Tallman’s lawyer in the wage and hour case that the Respondent intended to
file a motion to compel arbitration of those claims and almost 8 months after the Respondent
filed the motion in court.6 Although a general 10(b) defense was raised in the Respondent’s 30
answer to the complaint, the Respondent did not argue on brief that the allegations regarding the
maintenance of the arbitration agreement, or the Respondent’s attempt to enforce that agreement
in the Mika and Harter lawsuit were untimely.
The seminal case applying Section 10(b) of the Act is Bryan Mfg. Co.7 In that case, the 35
Supreme Court held that Section 10(b) of the Act barred a complaint that a collective-bargaining
agreement containing a union-security clause was unlawful because the Union did not represent
a majority of employees when it was recognized by the employer more than 6 months before the
unfair labor practice charge was filed. The conduct relied upon to establish the illegality of the
collective-bargaining agreement, i.e. , recognition of a minority union, thus occurred outside the 40
10(b) period. The Court stated that “a finding of violation which is inescapably grounded on
events predating the limitations period is directly at odds with the purposes of the Section 10(b)
proviso.” Id. at 422. The Court recognized however that Section 10(b) would not bar allegations

6 The Respondent’s motion to compel arbitration was not granted by the court until October 2011, within 6
months of the filing of Tallman’s charge.
7 Machinists Local 1424 (Bryan Mfg. Co.) v. NLRB, 362 U.S. 411 (1960).
JD(ATL)–04–14
10
where a contract was invalid on its face or, although validly executed, was unlawfully enforced
or administered within the 10(b) period. Id. at 423.
The Board has historically recognized that Section 10(b) of the Act does not bar
allegations of unlawful conduct that, though it began more than 6 months before a charge was 5
filed, would constitute a continuing violation. For example, Section 10(b) does not preclude
pursuit of a complaint allegation based on the maintenance and/or enforcement of an unlawful
rule or policy within the 10(b) period, even if the rule or policy was promulgated earlier. Register
Guard, 351 NLRB 1110 fn. 2 (2007); Lafayette Park Hotel, 326 NLRB 824, 825 (1998); Control
Services, 305 NLRB 435, 435 fn. 2, 442 (1991), enfd. mem. 961 F.2d 1568 (3d Cir. 1992).10
The two arbitration agreements at issue here were clearly promulgated more than six
months before the individual unfair labor practice charges were filed. Each of the Charging
Parties signed the two arbitration agreements outside the 10(b) period. However, there is no
question that the Respondent has continued to utilize at least one of the arbitration agreements15
and took steps to enforce that agreement against Mika and Harter within the 10(b) period.
Moreover, even though the Respondent may have initiated enforcement of the agreement against
Tallman more than 6 months before he filed his charge, those efforts did not come to a
conclusion until the State court granted the Respondent’s motion to compel arbitration of
Tallman’s wage and hour claims on October 4, 2011, about 3 months before Tallman filed his 20
charge. Accordingly, I find that the continued maintenance of the arbitration agreements and the
Respondent’s enforcement of them against the Charging Parties are not barred by Section 10(b)
of the Act.
(2) The Arbitration Agreements25
The General Counsel alleges that the two arbitration agreements utilized by the
Respondent and signed by the individual Charging Parties are unlawful on two grounds. First,
the language of both agreements is overly broad and would lead employees to reasonably believe
that by signing the agreement they were giving up their right to file unfair labor practice charges 30
with the Board. Second, consistent with the Board’s decision in D.R. Horton, supra, the Offer to
Participate, by waiving an employee’s right to initiate or participate in class or collective actions,
interferes with the employee’s Section 7 right to engage in protected concerted activity for
“mutual aid or protection.”
35
In D.R. Horton, supra, the Board found that an employee 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 therefore engaged in conduct protected by Section
7 of the Act. Consequently, an employer who seeks to interfere with, restrain, or coerce
employees engaged in filing such legal actions would violate Section 8(a)(1) of the Act. The 40
Board specifically held that D.R. Horton had violated the Act by requiring employees, as a
condition of employment, to sign arbitration agreements waiving their right to engage in such
activity. 357 NLRB No. 184 supra, slip op. at 7. The Board left open the question, raised here by
the Respondent, whether voluntary arbitration agreements containing a waiver of collective and
class actions violates the Act. Id. at 13, fn. 28.845

8 Counsel for the Acting General Counsel argued in his brief that the Respondent’s arbitration agreements at
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11
The first question to resolve is whether the Respondent required its employees to sign the
arbitration agreements at issue as a “condition of employment.” The older short-form arbitration
agreement is silent on its face as to whether the signatory employee was required to sign it as a
condition of employment. In contrast, the more recent Offer to Participate in Arbitration of 5
Disputes contains explicit language stating that the signatory employee’s “election to participate
in this process is not a condition of my employment.” In addition, the agreement contains bold
face provisions confirming the voluntary nature of the agreement and providing the signatory
with a 30-day period to change his or her mind and opt out of the agreement. Despite this plain
language, Tallman and Mika testified that they were given little opportunity to review the 10
agreement before signing it. The circumstances described by the two men were similar and
suggest that their “decision” to execute the agreement was not truly voluntary. The new hire
checklist utilized by the Respondent’s human resources personnel supports their testimony
because it shows that the Respondent expected all employees to sign the arbitration agreement
along with all the other paperwork necessary to become an employee. Finally, the fact that only 15
one personnel file, out of 160, did not contain a signed arbitration agreement and that file
contained no documents signed after 2004, confirms the finding that the arbitration agreements
were in fact mandatory, notwithstanding the language used in the agreement.
The next question is whether the arbitration agreements, in either version, unlawfully 20
waived employees’ right to file charges with the Board. Both versions of the arbitration
agreement are broadly worded with respect to coverage. The older short form agreement covers
“any controversy, dispute or claim” between the employee and the company or “company
parties”, including but not limited to “claims for violation of any federal . . . . law, statute,
regulation, or ordinance, except claims for workers’ compensation or unemployment insurance 25
benefits.” The more recent and longer version explicitly covers “all claims or controversies”
between the parties, specifically including “violation of any Federal . . . law, statute, regulation,
or ordinance.” Neither agreement includes the National Labor Relations Board among those
claims expressly excluded from coverage. The quoted language could reasonably be construed to
apply to unfair labor practice charges as such a charge is clearly a claim of violation of federal 30
law. Because employees could reasonably construe this language to include the filing of such
charges, it is an unlawful restriction on the employees’ exercise of their statutory rights. Supply
Technologies, LLC, 359 NLRB No. 58, slip op. at 1-2 (2012); U-Haul Co. of California, 347
NLRB 375, 377-378; See generally, Lutheran Heritage Village-Livonia, 343 NLRB 646, 647
(2004). Accordingly, I find that the Respondent violated Section 8(a)(1) of the Act by requiring 35
employees to sign arbitration agreements that would waive their right to file unfair labor practice
charges with the Board.
The Respondent at the hearing offered evidence that it had revised the Offer to Participate
in Arbitration of Disputes to specifically exclude from coverage unfair labor practice charges 40
under the Act. However, the Respondent’s General Counsel Newman testified that this new
version of the agreement had not yet been “rolled out” in Nevada. In addition, counsel for the

issue here would violate Sec. 8(a)(1) even if voluntary because they would restrict the rights of employees
who chose not to sign the agreement from acting in concert with those who did. As a result of my finding
here that the agreements at issue were not truly “voluntary,” I find it unnecessary to reach this argument.
JD(ATL)–04–14
12
Acting General Counsel offered evidence that employees recently hired in Nevada were still
being asked to sign the unlawful version. Finally, even if the Respondent had been able to show
that newly hired employees were offered this latest version of the agreement, the Respondent
admits it has not notified employees who previously signed the unlawful agreement that those
agreements are no longer in force and that there is a new agreement that preserves their right of 5
access to the Board. Under these circumstances, I must find that the Respondent has not
effectively cured the unfair labor practice found here. Passavant Memorial Area Hospital, 237
NLRB 138 (1978).
The final question before me is whether the Offer to Participate in Arbitration of Disputes 10
also violates the Act,9 under D.R. Horton, supra, because it waives employees’ right to initiate
and participate in collective and class actions regarding wages, hours and working conditions,
and whether the Respondent violated the Act by seeking to enforce this arbitration agreement
against the three Charging Parties. The plain language of the Offer to Participate, set forth above,
explicitly waives a signatory employee’s right “to initiate or to participate in representative 15
actions, collective actions, and/or class actions.” Section 6 of the agreement further expressly
waives not only the signatory employee’s right to initiate or participate in such group litigation in
court, but prohibits the arbitrator hearing any dispute pursuant to this agreement from
“consolidat[ing] Claims of different employees into one proceeding” or “hear[ing] arbitration as
a class action.” On its face, then, the arbitration agreement signed by the Charging Parties and 20
currently used by the Respondent in Nevada and elsewhere violates Section 8(a)(1) under the
principals enunciated by the Board in D.R. Horton, supra.
The Respondent raises a number of arguments in defending the arbitration agreement
here, some of which I have already addressed. The Respondent argues that the Board’s decision 25
in D.R. Horton, supra, was wrongly decided and is inconsistent with Supreme Court cases and
lower court cases upholding such waivers in private arbitration agreements, involving
commercial and labor/employment issues. The court of appeals recent decision rejecting the
Board’s reasoning and denying enforcement to the Board’s Order in D.R. Horton would seem to
support the Respondent’s case here. However, it is well established that it is my duty as an 30
administrative law judge to apply established Board precedent which the Supreme Court has not
reversed. It is the Board’s, and not the judge’s, prerogative to determine whether precedent
should be varied. Waco, Inc., 273 NLRB 746, 749 fn. 14 (1984). This is true even where, as here,
the appellate courts have criticized Board precedent. Pathmark Stores, 342 NLRB 378 fn. 1
(2004). 35
The Respondent also argues that it has not violated the Act because it has not prevented
the Charging Parties, or any other employee, from bringing or joining collective actions in
federal court. As noted in the facts above, the Respondent only filed a motion to compel
arbitration in the State court wage and hour class actions filed by Tallman and Mika and Harter. 40
There is no dispute that Tallman’s and Harter’s Federal lawsuits have proceeded without

9 The short form arbitration agreement that predates the Offer to Participate does not, on its face, waive the
employees’ right to seek class or collective relief in court or before an arbitrator. Moreover, the Respondent
did not rely on this earlier version of its arbitration agreement when it sought to compel arbitration of the
State court lawsuits filed by the Charging Parties, even though each had signed this version of the
agreement as well. For these reasons, I find that the short-form arbitration agreement did not violate Sec.
8(a)(1) under a D.R. Horton theory of a violation.
JD(ATL)–04–14
13
objection by the Respondent on the basis of the arbitration agreement. In addition, there is no
dispute that other employees and former employees have opted in to these Federal collective
actions. The Respondent relies on the following language from the Board’s decision in D. R.
Horton, supra:
5
[W]e hold only that employers may not compel employees to waive their NLRA
right to collectively pursue litigation of employment claims in all forums, arbitral
and judicial. So long as the employer leaves open a judicial forum for class and
collective claims, employees’ NLRA rights are preserved without requiring the
availability of classwide arbitration. Employers remain free to insist that arbitral 10
proceedings be conducted on an individual basis.
357 NLRB No. 184 supra, slip op. at 12 (emphasis in original).
I believe the Respondent is reading too much into this aspect of the Board’s decision. I 15
note that the Board used the conjunctive “and”, rather than disjunctive “or”, when referring to
the types of claims employees have a Section 7 right to file, i.e. “class and collective.” Collective
actions under federal law and class actions under State laws have different procedures,
substantive law and remedies so that precluding one type of group legal action may still interfere
with the right of employees to concertedly pursue relief regarding their wages, hours, and 20
working conditions. In any event, the plain language of the arbitration agreement here includes
“collective actions” among the rights being waived by signing the agreement. This would lead an
employee to reasonably believe that by signing the Offer to Participate, he would be waiving his
right to file both federal collective and State class action lawsuits. The fact that the Respondent
chose not to enforce this agreement in the Charging Parties’ Federal lawsuits does not mean it 25
could not seek to enforce the agreement in a future collective action filed by the Charging Parties
or any other employee. Where the express language of the arbitration agreement waives the
employee’s right to collectively pursue litigation of employment claims in all forums, as it does
here, a violation may be found even though the Respondent may choose in certain cases not to
enforce the broad language of the agreement. It is the chilling effect of the language itself that 30
interferes with, restrains and coerces employees in the exercise of their statutory rights.
The Respondent also argues that an unfair labor practice finding based on its successful
pursuit of the motion to compel arbitration in the Charging Parties’ State court lawsuits would
interfere with its constitutional right of access to the courts under the Supreme Court’s decision 35
in Bill Johnson’s Restaurant v. NLRB, 461 U.S. 731 (1983). Counsel for the Acting General
Counsel argues that, even under Bill Johnson’s Restaurant, the Board may find unlawful an
employer’s litigation that has “an objective that it is illegal under federal law.” Id. at 737 fn. 5. In
the present case, the Respondent’s motion to compel arbitration was an attempt to enforce an
unlawful arbitration agreement, as well as an attempt to prevent employees’ protected conduct. 40
As such, it is not privileged by the rationale of Bill Johnson’s, supra. See Regional Construction
Corp., 333 NLRB 313, 319 (2001) (a lawsuit which is an attempt to enforce an underlying unfair
labor practice); Long Elevator, 289 NLRB 1095 (1988) (where the relief sought is prevention of
protected employee conduct).
45
After careful consideration of the evidence and the arguments of the parties, I find that
the Respondent’s Offer to Participate in Arbitration of Disputes violates Section 8(a)(1) of the
JD(ATL)–04–14
14
Act as alleged in the complaint because it requires employees, as a condition of employment to
waive their Section 7 right to collectively pursue litigation of employment claims in all forums.
D.R. Horton, Inc., supra.10 Because the underlying arbitration agreements were unlawful on their
face, I find that the Respondent’s efforts to enforce these agreements through the motions to
compel arbitration of the Charging Parties’ lawsuits violated Section 8(a)(1) of the Act.5
CONCLUSIONS OF LAW
1. By maintaining arbitration agreements that employees would reasonably believe
waived their right to file unfair labor practice charges with the Board, the Respondent has 10
engaged in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and
Section 2(6) and (7) of the Act.
2. By maintaining arbitration agreements that waive its employees’ right to
collectively pursue legal action regarding their employment terms, the Respondent has engaged 15
in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and Section
2(6) and (7) of the Act.
3. By enforcing these unlawful arbitration agreements through motions to compel
arbitration of State court class actions filed by the Charging Parties, the Respondent has engaged 20
in unfair labor practices affecting commerce within the meaning of Section 8(a)(1) and Section
2(6) and (7) of the Act.
REMEDY
25
Having found that the Respondent has engaged in certain unfair labor practices, I shall
order it to cease and desist therefrom and to take certain affirmative action designed to effectuate
the policies of the Act. Because the Respondent uses the unlawful arbitration agreement at all of
its facilities, I shall recommend a nationwide order requiring the Respondent to rescind the
agreement and to notify its employees that it will no longer enforce the waiver of class and 30
collective actions that is part of the agreement. A determination regarding the specific locations
where such notice shall be posted will be left for the compliance stage of this proceeding.
Because I have found that the Respondent’s motions to compel arbitration of the Charging
Parties’ State court lawsuits was unlawful, I shall recommend that the Respondent be ordered to
reimburse the Charging Parties for any litigation expenses incurred in opposing the Respondent’s 35
motions. I shall also recommend that the Respondent be ordered to seek to have the State court
orders granting its motions to compel arbitration vacated, if the time for doing so has not expired.
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended1140

10 The Respondent, in its brief, argues that a decision in this case should be deferred until the Supreme Court
has ruled on the legality of the recess appointment of Board Member Becker, who was involved in the D.R.
Horton case. See Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013), cert. granted No. 12-1281 (June
24, 2013). The Board has consistently rejected similar arguments attacking its authority to Act in light of
pending litigation over the recess appointment issue. I see no reason to deviate from this policy of the
Board.
11 If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations, the findings,
JD(ATL)–04–14
15
ORDER
The Respondent, CPS Security (USA), Inc., a wholly owned subsidiary of CPS Security
Solutions, Inc., Gardena, California, its officers, agents, successors, and assigns, shall5
1. Cease and desist from
(a) Requiring employees, as a condition of employment, to sign an arbitration
agreement that would lead the employees to reasonably believe that they are waiving their right 10
to file unfair labor practice charges with the Board.
(b) Requiring employees, as a condition of employment, to sign an arbitration
agreement that waives the employees’ right to collectively pursue legal action regarding their
wages, hours, and working conditions in all forums.15
(c) Enforcing the unlawful arbitration agreement through the filing of a
motion to compel arbitration of any class and/or collective actions filed by employees.
(d) In any like or related manner interfering with, restraining, or coercing 20
employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action necessary to effectuate the policies of the
Act.
25
(a) Rescind or revise its arbitration agreements to make it clear to employees
that the agreement does not waive their right to file unfair labor practice charges with the Board
or to collectively pursue legal actions regarding their employment conditions in all forums.
(b) Notify any employee who has already signed the unlawful arbitration 30
agreements that these agreements will no longer be enforced to prohibit them from filing unfair
labor practice charges with the Board or pursuing collective and/or class actions regarding their
employment conditions in any court.
(c) Reimburse Dennis Tallman, Donald Mika, and Beryl Harter for any legal 35
expenses incurred in opposing the Respondent’s motions to compel arbitration of their Nevada
State court class actions.
(d) Take whatever steps are necessary, to the extent the Respondent is not
time-barred from doing so, to vacate the Nevada State court orders compelling Tallman, Mika 40
and Harter to arbitrate their class action claims.

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.
JD(ATL)–04–14
16
(e) Within 14 days after service by the Region, post at its Henderson, Nevada
facility, and at all facilities where the unlawful arbitration agreements have been utilized, copies
of the attached notice marked “Appendix.”12 Copies of the notice, on forms provided by the
Regional Director for Region 28, after being signed by the Respondent’s authorized
representative, shall be posted by the Respondent and maintained for 60 consecutive days in 5
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 the
Respondent customarily communicates with its employees by such means. Reasonable steps
shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by 10
any other material. In the event that, during the pendency of these proceedings, the Respondent
has gone out of business or closed the facility involved in these 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 July 9, 2011.
15
(f) Within 21 days after service by the Region, file with the Regional Director
a sworn certification of a responsible official on a form provided by the Region attesting to the
steps that the Respondent has taken to comply.
Dated, Washington, D.C. February 11, 201420
_________________________
Michael A. Marcionese25
Administrative Law Judge

12 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.”
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 enforce mandatory arbitration agreements that waive your right to
file unfair labor practice charges with the National Labor Relations Board or to collectively
pursue legal actions regarding your employment conditions.
WE WILL NOT enforce, through the filing of a motion to compel arbitration, that portion of our
arbitration agreement that prohibits the filing of collective and /or class actions in all forums.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights guaranteed you by Section 7 of the Act.
WE WILL reimburse Dennis Tallman, Donald Mika, and Beryl Harter for any litigation
expenses incurred since July 9, 2011, directly related to opposing our efforts to compel
individual arbitration of their class action claims filed in State court.
WE WILL, if requested by Dennis Tallman, Donald Mika, and Beryl Harter, join with each of
them in a motion to the appropriate State court in Nevada to vacate the orders compelling
individual arbitration of their State law class actions, if such motions may be timely filed.
WE WILL rescind our arbitration agreements to the extent they waive your right to file unfair
labor practice charges with the National Labor Relations Board or to collectively pursue legal
actions regarding your employment conditions.
CPS SECURITY (USA), INC., a wholly owned
subsidiary of CPS SECURITY SOLUTIONS, INC.
(Employer)
JD(ATL)–04–14
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.
2600 North Central Avenue, Suite 1800, Phoenix, AZ 85004-3099
(602) 640-2160, Hours: 8:15 a.m. to 4:45 p.m.
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, (602) 640-2146