PRIME HEALTHCARE PARADISE VALLEY, LLC

National Labor Relations Board - Administrative Judge Opinions

May 8, 2015

21-CA-133781 (N.L.R.B. May. 8, 2015)

JD(ATL)– 09–15
National City, CA
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
ATLANTA BRANCH OFFICE
PRIME HEALTHCARE PARADISE
VALLEY, LLC
and Cases 21-CA-133781
21-CA-133783
RICHARD CARDONA, an Individual
and
STEPHENE ORTEGA, an Individual
Jean C. Libby, Esq.,. for the General Counsel.1
Robert Mussig, Esq., for the Respondent.2
Janette C. Lee, Esq., for the Charging Party.
DECISION
STATEMENT OF THE CASE
WILLIAM NELSON CATES, Administrative Law Judge. These cases were tried
before me in San Diego, California, on February 23, 2015.3 The charge initiating Case 21-CA-
133781 was filed by Richard Cardona (Cardona) on July 29, and the charge initiating Case 21-
CA-133783 was filed by Stephene Ortega (Ortega) that same date. After its investigation, the
Government, on November 20, issued an order consolidating cases, consolidated complaint and
notice of hearing, (the complaint). The complaint alleges the Hospital, since at least January 31,
has maintained as a condition of employment for all its employees at its National City, California
facility, an agreement entitled “Mediation and Arbitration Agreement” (Arbitration Agreement)
that contains provisions requiring employees to resolve employment-related disputes exclusively
through mediation and arbitration proceedings. Additionally, it is alleged that, since at least

1 I shall refer to counsel for the General Counsel as counsel for the Government and to the General Counsel
as the Government.
2 I shall refer to counsel for the Respondent as counsel for the Hospital and to the Respondent as the
Hospital.
3 All dates are 2014, unless indicated otherwise.
JD(ATL)–09–15
2
January 31, employees would reasonably conclude the provisions of the Arbitration Agreement
would restrict access to the Board and its processes. It is alleged that, on or about July 25, 2012,
Cardona, as a condition of his employment with the Hospital at its National City facility, signed
the Arbitration Agreement. Further, it is alleged the Hospital, since April, has maintained as a
condition of employment for all its National City facility employees, a revised arbitration 5
agreement, entitled “Mutual Agreement to Arbitrate” (Updated Agreement) that contains
provisions requiring employees to resolve employment-related disputes exclusively through
individual arbitration proceeding and to relinquish any rights they have to resolve disputes
through collective or class action. It is also alleged that since April, employees would
reasonably conclude that the provisions of the Updated Agreement would preclude them from 10
engaging in conduct protected by Section 7 of the National Labor Relations Act (the Act). On
April 16, Ortega, as a condition of her employment with the Hospital, at its National City
facility, signed the Updated Agreement. It is alleged that since on or about July 9, the Hospital
has sought to enforce the Arbitration Agreement and the Updated Agreement by filing Petitions
to Compel Arbitration on an Individual Basis in San Diego County California Superior Court. It 15
is alleged the actions set forth above constitute violations of Section 8(a)(1) of the Act.
The Hospital in its answer to the complaint, at trial and in its posttrial brief denies having
violated the Act in any manner alleged in the complaint.
20
The parties were given full opportunity to participate, to introduce relevant evidence, to
examine and cross-examine witnesses, and to file briefs. The parties entered into a written 9
page, 19 paragraphs (with certain subparagraphs and attachments) stipulation of facts which was
received into the record as an exhibit (Government Exh. 2) after which the Government and the
Charging Parties rested. The Hospital called one witness and rested. I have studied the whole 25
record, the posttrial briefs, and the authorities cited. I conclude and find the Hospital violated the
Act substantially as alleged in the complaint.
FINDINGS OF FACT
30
I. JURISDICTION AND SUPERVISORY/AGENCY STATUS
It is stipulated the Hospital is a Delaware limited liability company, with an office and
place of business located in National City, California, where it is engaged in the business of
operating an acute care hospital located at 2400 East 4th Street. During the 12-month period 35
ending on September 19, a representative period, the Hospital, in conducting its operations
derived gross revenues in excess of $250,000 and purchased and received at its National City,
California facility goods valued in excess of $50,000 directly from points outside the State of
California. The parties stipulate and I find the Hospital is an employer engaged in commerce
within the meaning of Section 2(2), (6), and (7) of the Act, and a health care institution within 40
the meaning of Section 2(14) of the Act.
The parties stipulated Lorraine Villegas is, and since 2008 has been, the Hospital’s
regional human resources manager (HR Manager Villegas) and is a supervisor and agent of the
Hospital within the meaning of Section 2(11) and (13) of the Act.45
JD(ATL)–09–15
3
II. THE ALLEGED UNFAIR LABOR PRACTICES
Facts
5
The operative facts, by stipulation of the parties and testimony of the one witness called,
are not in dispute and are set forth below. In the stipulation of facts the parties provided, as
attachments, the actual documents described in the stipulations, which documents were received
in evidence.
10
The Hospital has, from at least July 25, 2012, until May 13, maintained, as a condition of
employment, at the National City facility for all of its employees an agreement entitled
“Mediation and Arbitration Agreement,” that contains provisions requiring employees to resolve
employment-related disputes as set forth in the “Mediation and Arbitration Agreement”
exclusively through mediation and arbitration proceedings. The provisions in question follow:15
2 Agreement to Arbitrate; Designated Claims
. . . . . Except as otherwise provided in this Agreement, the Company and the
Employee hereby consent to the resolution by binding arbitration of all claims or
controversies for which a federal or state court would be authorized to grant relief, 20
whether or not arising out of, relating to or associated with the Employee's
employment with the Company.
Claims covered by this Agreement include, but are not limited to, claims for
wages or other compensation due; claims for breach of any contract or covenant,
express or implied; tort claims; claims for discrimination or harassment on bases 25
which include but are not limited to race, sex, sexual orientation, religion, national
origin, age, marital status, disability or medical condition; claims for benefits,
(except as excluded in paragraph 9), and claims for violation of any federal, state
or other governmental constitution, statute, ordinance, regulation, or public policy
including but not limited to Title VII of the Civil Rights Act, Age Discrimination 30
in Employment Act, The Americans with Disabilities Act, Family and Medical
Leave Act, Equal Pay Act and their state equivalents. The purpose and effect of
this Agreement is to substitute arbitration as the forum for resolution of the
Claims; all responsibilities of the parties under the statutes applicable to the
Claims shall be enforced.35
The Hospital’s employment complement has been approximately 1200 with an employee
turnover rate of 01.8 percent annually. All new employees from 2010 until May 2014 have, as a
condition of their employment, signed the Hospital’s Arbitration Agreement. In 2014 the
Hospital stopped using the Arbitration Agreement form and commenced using the Updated 40
Agreement. Villegas stated Cardona was required to sign the Arbitration Agreement at the time
he was hired in July 2012.
The human resources department handles all legal claims filed at the Hospital involving
administrative charges. HR Manager Villegas never knew of the Hospital attempting to use the 45
Arbitration Agreement to compel arbitration of a charge filed with the National Labor Relations
JD(ATL)–09–15
4
Board (the Board) nor to discourage employees from filing such charges. The Hospital has never
sought, during Villegas’ tenure, to use the Arbitration Agreement to compel arbitration of any
charge filed with administrative agency. According to HR Manager Villegas, there were six
charges filed with administrative agencies, namely the Equal Employment Opportunity
Commission (EEOC) and California’s Department of Fair Employment and Housing, from 2010 5
until May 2014. Villegas was not sure if all six employees had signed the Arbitration Agreement,
as it depended on when the employees were hired, but some had. Cardona and Ortega were not
included in the six persons filing administrative charges; however, when they are included, four
were represented by counsel and four were not. HR Manager Villegas testified the Hospital
never posted any notices to employees at the Hospital informing them they were not forbidden 10
from filing charges with the Board nor did the Hospital post anything about Board charges.
Cardona was employed as a patient account registrar by the Hospital at its National City
facility from July 31, 2012, until he resigned effective March 8, and as a condition of his
employment with the Hospital, on or about July 25, 2012, received and signed the “Mediation 15
and Arbitration Agreement.”
Since at least May 13, the Hospital has required all of its employees at the National City
facility to sign, and has maintained as a condition of employment for all of its employees at the
National City facility, a revised arbitration agreement, entitled “Mutual Agreement to Arbitrate20
[Updated Agreement],” requiring employees to resolve employment-related disputes as set forth
in the “Mutual Agreement to Arbitrate” exclusively through individual arbitration proceedings
and to waive any right they have to file, maintain or seek to resolve such disputes through class
or collective action. The provisions in question follow:
25
Section 4: Claims Subject to Arbitration The “Claims” covered by this
Agreement include, but are not limited to…. the California Labor Code, and the
California Wage Orders…
Section 5 Arbitration of Individual Claims Only
All Claims covered by this Agreement must be submitted on an individual basis. 30
No claims may be arbitrated on a class, representative, or collective basis. The
Parties expressly waive any right with respect to any covered Claims to submit,
initiate, or participate in a representative capacity, or as a plaintiff, claimant or
member in a class action, collective action or other representative or joint action,
regardless of whether the action is filed in arbitration or in court.35
Section 5.1: No Class Or Collective Action Claims
By signing this agreement, the parties agree that each may bring and pursue
claims against the other only in their individual capacities, and may not bring,
pursue, or act as a plaintiff or class member, in any purported class or collective
proceeding.40
Section 5.2: No Representative Action Claims
The parties further agree that neither party may bring, pursue, or act as a plaintiff
or representative in any purported representative proceeding or action, including
any claims under the California private attorneys general act, or otherwise
participate in any such representative proceeding or action other than on an 45
individual basis.
JD(ATL)–09–15
5
Section 5.3: NLRA Claims
Notwithstanding the unavailability of class, representative, or collective
arbitration under this Agreement, nothing herein is intended to limit your rights
under Section 7 of the National Labor Relations Act and you will not experience
any retaliation for exercising such rights. 5
Since about 2007 Ortega has been employed as a respiratory care practitioner by the
Hospital at the National City facility. About May 13, Ortega, as a condition of her employment
with the Hospital, signed the “Mutual Agreement to Arbitrate.”
10
About April 14, Ortega filed a class action complaint against the Hospital in San Diego
County Superior Court, in the case Stephene Ortega vs. Prime Healthcare Paradise Valley, LLC,
Civil Case No. 37-2014-00011240-CU-OECTL, alleging, inter alia, wage-and-hour claims under
the California Labor Code, on behalf of herself and on behalf of a class or classes of purportedly
similarly-situated current and former employees of the Hospital. 15
About June 20, Ortega and Cardona filed an amended complaint in the action described
above which added Cardona as a named plaintiff and added other causes of action under the
California Labor Code.
20
About July 10, the Hospital filed Petitions to Compel Individual Arbitration of the claims
asserted by Ortega and Cardona in the first amended class action complaint, described above, in
San Diego County Superior Court, Case No. 37-2014-00011240-CU-0E-CTL.
On November 6, Ortega and Cardona filed Oppositions to the Hospital’s Petitions to 25
Compel Individual Arbitration.
On November 14, the Hospital filed Reply Briefs in support of its Petitions to Compel
Individual Arbitration.
30
On November 21, the San Diego County Superior Court issued a tentative ruling,
granting Respondent's Petitions to Compel Individual Arbitration.
On November 21, the San Diego County Superior Court confirmed the tentative ruling
described above in a minute order. 35
The parties also stipulated to the following brief position statements with additional
positions covered in their posttrial briefs:
The Government takes the position the Hospital enforced the provisions of the 40
“Mediation and Arbitration Agreement” and the “Mutual Agreement to
Arbitrate,” described above, by filing the Petitions and supporting documents,
alluded to above, in order to compel Cardona and Ortega to arbitrate their claims
not on a class or collective basis but individually, and, in doing so violated
Section 8(a)(1) of the Act, because it prohibited employees from filing, 45
JD(ATL)–09–15
6
maintaining or seeking to resolve employment-related disputes through class or
collective action.
The Hospital takes the position that the “Mediation and Arbitration Agreement” and the
“Mutual Agreement to Arbitrate” are lawful under AT&T Mobility LLC V. Concepcion (2011) 5
131 S. Ct. 174; Am. Express Co. v. Italian Colors Rest. (2013) 133 S. Ct. 2304, D.R. Horton, Inc.
v. NLRB (5th Cir. 2013) 737 F.3d 344; Owen v. Bristol Care, Inc., 702 F.3d 1050, 1055, (8th Cir.
2013); Sutherland v. Ernst & Young LLP 726 F.3d 290, (2d Cir. 2013), and a host of other
authorities, and that its actions taken to enforce these agreements in connection with Cardona
and Ortega's lawsuit, including its filing of the Petitions and supporting documents described 10
above, were not unlawful.
Additionally, the Government takes the position that the “Mediation and Arbitration
Agreement” described above also violates Section 8(a)(1) of the Act because employees would
reasonably believe it restricts their access to the Board and its processes.15
The Hospital’s position is that employees would not reasonably believe the “Mediation
and Arbitration Agreement” restricts their access to the Board and/or its processes because it
specifically states it only applies to claims and disputes that would otherwise be “litigated in a
court or by jury trial,” and therefore does not apply to administrative agency proceedings.20
STATEMENT OF THE ISSUES
The Parties stipulate the following issues be decided by the Judge. Usually, the issues to
be decided by the trial judge are framed by the pleadings; however, the Parties stipulated issues25
closely track those raised by the pleadings and I therefore will decide the issues that follow:
1. Whether the Hospital’s maintenance of the “Mediation and Arbitration
Agreement,” as a condition of employment from at least January 31, until approximately May
13, violates Section 8(a)(1) of the Act because it prohibits employees from filing, maintaining, or 30
seeking to resolve employment-related disputes through class or collective action.
2. Whether the Hospital’s maintenance of the “Mediation and Arbitration
Agreement,” as a condition of employment from at least January 31, until approximately May
13, violates Section 8(a)(1) of the Act because employees would reasonably believe that it 35
restricts their access to the Board and its processes.
3. Whether the Hospital’s maintenance of the “Mutual Agreement to Arbitrate,” as a
condition of employment and continued employment from at least May 13, violates Section
8(a)(1) of the Act because it prohibits employees from filing, maintaining or seeking to resolve 40
employment-related disputes through class or collective action.
4. Whether the Hospital violated Section 8(a)(1) of the Act by filing Petitions to
Compel Arbitration in San Diego County Superior Court on July 9, so as to preclude Cardona
and Ortega from pursuing, on a class or collective action basis, the claims alleged in their first 45
amended class-action complaint filed in San Diego County Superior Court.
JD(ATL)–09–15
7
Analysis
As indicated elsewhere here, the Government alleges the Hospital violated Section
8(a)(1) of the Act by maintenance of its Arbitration Agreement, as a condition of employment, 5
from at least July 25, 2012, to May 2014, because it prohibits employees from filing,
maintaining, or seeking to resolve employment-related claims through class or collective action;
and, separately that the Hospital’s maintenance of its Arbitration Agreement violates Section
8(a)(1) of the Act, during the applicable period, because employees would reasonably believe it
restricts their access to the Board and its processes. I agree, and find, both violations with 10
respect to the Arbitration Agreement.
It is clear, from at least July 25, 2012, to May 2014, the Hospital maintained, as a
condition of employment, its Arbitration Agreement. Patient account registrar employee
Cardona signed the Arbitration Agreement on July 25, 2012.15
Whether the Hospital’s Arbitration Agreement violates Section 8(a)(1) of the Act
involves an application of the Board’s decisions in D. R. Horton, Inc., 357 NLRN No. 184
(2012), enf. denied in relevant part 737 F.3d 344 (5th Cir. 2013), petition for rehearing en banc
denied (5th Cir. No. 12-60031, April 16, 2014); Murphy Oil USA, Inc., 361 NLRB No. 72 20
(2014); and Cellular Sales of Missouri, LLC, 362 NLRB No. 27 (2015). In these cases, and, as
specifically stated in D. R. Horton (the Board reaffirmed the relevant holdings of D. R. Horton in
Murphy Oil) the Board concluded an employer violates Section 8(a)(1) of the Act by maintaining
and enforcing a mandatory and binding arbitration policy that waives the rights of employees to
maintain class or collective actions in all forums, whether arbitral or judicial because “the right 25
to engage in collective action—including collective legal action—is the core substantive right
protected by the NLRB and is the foundation on which the Act and Federal labor policy rests”
D. R. Horton, 357 NLRB No. 184, slip op. at 12 (emphasis in original). The Board in Murphy
Oil clearly explained it was protecting a substantive right:
30
For almost 80 years, Federal labor law has protected the right of
employees to pursue their work-related legal claims together, i.e., with one
another, for the purpose of improving their working conditions. The core
objective of the National Labor Relations Act is the protection of workers’ ability
to act in concert, in support of one another. Section 7 of the Act implements that 35
objective by guaranteeing employees the “right . . . to engage in . . . concerted
activities for the purpose of collective bargaining or other mutual aid or
protection.” Our national labor policy—aimed at averting “industrial strife and
unrest” and “restoring equality of bargaining power between employers and
employees”—has been built on this basic premise. In protecting a substantive 40
right to engage in collective action—the basic premise of Federal labor policy—
the National Labor Relations Act is unique among workplace statutes. Murphy Oil
slip op. 1[Footnotes omitted]
Section 7 of the Act protects the right of employees to file charges with the Board or 45
otherwise access the Board’s processes. Bill’s Electric, Inc., 350 NLRB 292, 296 (2007); U-Haul
JD(ATL)–09–15
8
Co. of California, 347 NLRB 375, 377 (2006), enfd. mem. 255 Fed. Appx. 527 (D.C. Cir 2007);
D. R. Horton, 357 NLRB No. 184, slip op. at 2. Although the Arbitration Agreement here does
not specifically state employees may not file charges with the Board, a rule which does not
explicitly restrict Section 7 rights may, nevertheless, violate the Act if employees would
reasonably construe the language to prohibit Section 7 activity. Lutheran Heritage Village-5
Livonia, 343 NLRB 646, 647 (2004).
I find the language of the Arbitration Agreement prohibits employees from filing,
maintaining or seeking to resolve employment-related claims through class or collective action
and also would reasonably be construed by employees to prohibit or restrict their Section 7 right 10
to file an unfair labor practice charge. The language broadly mandates arbitration of “all claims
or controversies for which a federal or state court would be authorized to grant relief” and
includes, but is not limited to, “claims for wages or other compensation due,” “claims for
discrimination,” and “claims for violation of any federal, state or other governmental
constitution, statute, ordinance, regulation, or public policy including but not limited to Title VII 15
of the Civil Rights Act, Age Discrimination in Employment Act, the Americans with Disabilities
Act, Family and Medical Leave Act, Equal Pay Act and their state equivalents.” I note, in
agreement with the Government, that its reach is not limited to claims that originate or arise in
Federal or State court, but, rather applies to all claims for which a Federal or State court is
authorized to grant relief notwithstanding where the claims were originally filed. 20
Board decisions are enforced by United States courts of appeal and that fact alone places
employees in a position where they could construe the Arbitration Agreement as precluding them
from filing charges with the Board. Further, it is from the all-inclusive language of the
Arbitration Agreement, that employees reasonably could construe it to cover unfair labor 25
practice claims arising from their employment relation. Cellular Sales of Missouri, LLC, 362
NLRB No. 27, slip op. at 1 fn. 4 (2015) (work rule reasonably construed to interfere with ability
to file charges with Board even if rule did not expressly prohibit access to Board). The Board
noted, in Flex Frac Logistics, LLC, 358 NLRB No. 127, slip op. at 2 (2012), long before it
restated same in Murphy Oil, slip op. at 19, that Board law is settled that ambiguous employer 30
rules, including those in arbitration agreements, are construed against the employer that crafted
the rules.
The Hospital’s contention the Arbitration Agreement does not apply to administrative
charges filed with an agency, such as the Board, because it “only applies to claims that would be 35
asserted in a court” and “[a]ny suggestion that a ‘reasonable person’ would not know the
difference [between a court and an administrative agency] insults the intelligence of the
Hospital’s employees and contradicts the facts established at trial” does not save the Arbitration
Agreement rule here. The Board does not assume employees have specialized legal knowledge
which could be employed in understanding such clauses, to exclude NLRB claims. For instance, 40
the Board found language limiting a compulsory arbitration rule to claims “that may be lawfully
resolve[d] by arbitration” would not be reasonably understood by employees to exclude unfair
labor practice charges from the scope of the agreement. 2 Sisters Food Group, 357 NLRB No.
168, slip op. at 1-2, 22 (2011); see also U-Haul, supra, 347 NLRB at 377-378.
45
JD(ATL)–09–15
9
The fact HR Manager Villegas never knew of the Hospital attempting to compel
arbitration of a charge filed with the Board, nor, knew of the Hospital attempting to discourage
employees from filing charges with the Board does not save the rule. The issue is whether a
reasonable employee would construe the rule as prohibiting access to the Board. The fact some
employees filed charges with the Equal Employment Opportunity Commission and California’s 5
Department of Fair Employment and Housing does not require a different conclusion than I
reach here. The fact the Hospital may never have intended its Arbitration Agreement to apply to
administrative proceedings does, in no way, save the rule as there is no evidence such was ever
communicated to the employees.
10
In summary, I find the Hospital violated Section 8(a)(1) of the Act by maintenance of its
Arbitration Agreement, as a condition of employment, from at least July 25, 2012, to May 2014,
because it prohibits employees from filing, maintaining, or seeking to resolve employment-
related claims through class or collective action; and, separately the Hospital’s maintenance of its
Arbitration Agreement violates Section 8(a)(1) of the Act because employees would reasonably 15
believe it restricts access to the Board and its processes. I will hereinafter address more fully the
Hospital’s defenses to the class action portion of its agreements, rather than doing so twice—
once here—and again in the next section of my decision.
As indicated elsewhere here, the Government alleges the Hospital is in violation of 20
Section 8(a)(1) of the Act by maintaining, from at least May to the present, its Updated
Agreement, as a condition of employment for all its employees, because it prohibits employees
from filing, maintaining, or seeking to resolve employment-related claims through class or
collective action.
25
Respiratory care practitioner employee Stephene Ortega, as a condition of her
employment, signed, on May 13, the Updated Agreement. As demonstrated by the provisions of
the Updated Agreement, set forth elsewhere here, the agreement expressly prohibits class or
collective litigation. Additionally, the parties stipulated the Updated Agreement requires
“employees to resolve employment related disputes as set forth in the ‘Mutual Agreement to 30
Arbitrate’ exclusively through individual arbitration proceedings and to waive any right they
have to file, maintain or seek to resolve such disputes through class or collective action.”
Again a brief summary of portions of the parties positions on this specific issue is helpful
at this point.35
The Hospital contends that the Federal Arbitration Act (FAA), 9 U.S.C. § 1 et seq.,
preempts any National Labor Relations Act rule prohibiting class or collective action waivers in
arbitration agreements such as at issue here. The Hospital notes, citing CompuCredit Corp. v.
Greenwood, 132 S.Ct. 665, 669 (2012), the FAA proclaims a strong policy in favor of 40
arbitration, and quotes the Supreme Court in AT&T Mobility LLC v. Concepcion, 131 S.Ct. 1740,
1749 (2011), that “the FAA was designed to promote arbitration.” The Hospital contends the
FAA requires enforcement of arbitration agreements according to their terms citing Dean Witter
Reynolds, Inc. v. Byrd, 470 U.S. 213, 221 (1985). The Hospital further contends where the
FAA’s goals clash with those of another Federal statute the FAA’s mandate in favor of 45
arbitration prevails unless it “has been overridden by a contrary congressional command.”
JD(ATL)–09–15
10
American Express v. Italian Colors Rest. 133 U.S. S.Ct. 2304 (2013). The Hospital notes the
U.S. Court of Appeals for the Fifth Circuit rejected the Board’s Horton decision, D. R. Horton,
Inc. v. NLRB, 737 F 3d 344 (5th Cir. 2013), and the Board’s Horton decision has been viewed as
unpersuasive, in decisions of the Second (Sutherland v. Ernst & Young, LLP, 726 F.3d 290 (2d
Cir. 2013)), and Eighth (Owens v. Bristol Care, Inc., 702 F.3d 1050 (8th Cir, 2013)), circuits. 5
The Hospital references more than 40 other cases of courts across the nation which have
examined the same issue as here and “virtually all” concluded class or collective action waivers
enforceable. The Hospital urges “class action waivers are entirely permissible under binding
U.S. Supreme Court authority” and the Board’s D. R. Horton and Murphy Oil decisions are
inconsistent with that authority and must be disregarded. The Hospital urges I find the arbitration 10
agreements here valid and binding.
The Government contends the Hospital’s requiring its employees, as a condition of
employment, to waive filing joint, class, or collective claims addressing their wages, hours, or
other working conditions in any forum, such as the case here, violates Section 8(a)(1) of the Act. 15
The Government asserts, for the reasons explained in D. R. Horton, Inc. and Murphy Oil, the
Board has concluded there is no conflict between the Federal Arbitration Act and the National
Labor Relations Act because § 2 of the FAA “provides that arbitration agreements may be
invalidated in whole or in part” for the same reason any contract may be invalidated, including
they are unlawful or contrary to public policy. The Government urges the arbitration agreements 20
here are unlawful under the Act, against public policy, and, should not be enforceable under the
FAA. The Government contends the Board, in its two-above cases, emphasized that an
arbitration policy which prohibits collective or class action is unlawfully, does not conflict with
the FAA, because the “intent of the FAA was to leave substantive rights undisturbed.” Thus the
Government urges the arbitration agreements here, as enforced, are unlawful because they 25
prohibit employees from exercising their Section 7 right to engage in concerted activity, a
substantive right, which the Supreme Court in Eastex, Inc. v. NLRB, 437 U.S. 556, 567 (1978),
held includes “seek[ing] to improve working conditions through resort to administrative and
judicial forums.”
30
The Government specifically notes the concern here is not with the FAA or with
arbitration. The Government points out Board rulings neither evince nor or they motivated by
any hostility to arbitral resolution of disputes, nor does the Government take the position
employees cannot be required to arbitrate their work-related disputes. The Government contends
the illegality here is that such work-related claims must be arbitrated individually, and when such 35
a requirement is insisted upon, as a condition of employment, it contravenes substantive rights
protected by Section 7 of the Act.
Further guidance from the Board’s Murphy Oil case is appropriate at this point. In its
decision the Board concluded “an employer violates the National Labor Relations Act ‘when it 40
requires employees covered by the Act, as condition of their employment, to sign an agreement
that precludes them from filing joint, class, or collective claims addressing their wages, hours, or
other working conditions against the employer in any forum, arbitral or judicial’” [footnote
omitted]. The Board held:
45
JD(ATL)–09–15
11
The Board reached this result relying on the substantive right, at the core
of the Act, to engage in collective action to improve working conditions. It did so
“notwithstanding the Federal Arbitration Act (FAA), which generally makes
employment related arbitration agreements judicially enforceable,” finding no
conflict, under the circumstances, between Federal labor law and the FAA. 5
“Arbitration [under the FAA] is a matter of consent, not coercion,” and a valid
arbitration agreement may not require a party to prospectively waive its “right to
pursue statutory remedies.” But arbitration agreements that are imposed as a
condition of employment, and that compel NLRA-covered employees to pursue
workplace claims against their employer individually, do require those employees 10
to forfeit their substantive right to act collectively—and so nullify the
foundational principle that has consistently informed national labor policy as
developed by the Board and the courts. To be clear, the NLRA does not create a
right to class certification or the equivalent, but as the D. R. Horton Board
explained, it does create a right to pursue joint, class, or collective claims if and as 15
available, without the interference of an employer-imposed restraint. This case
turns on the issue decided in D. R. Horton. The Respondent urges us to overrule
that decision, which has been rejected by the U.S. Court of Appeals for the Fifth
Circuit and viewed as unpersuasive in decisions of the Second and Eighth Circuits
(although the analysis by those courts was abbreviated). Scholarly support for the 20
Board’s approach, by contrast, has been strong. We have independently
reexamined D. R. Horton, carefully considering the Respondent’s arguments,
adverse judicial decisions, and the views of our dissenting colleagues. Today we
reaffirm that decision. Its reasoning and its result were correct, as we explain
below, and no decision of the Supreme Court speaks directly to the issue we25
consider here. “The substantive nature of the right to group legal redress is what
distinguishes the NLRA from every other statute the Supreme Court has
addressed in its FAA jurisprudence,” and the Fifth Circuit itself acknowledged the
“force of the Board’s efforts to distinguish the NLRA from all other statutes that
have been found to give way to requirements of arbitration.” Having reaffirmed 30
the D. R. Horton rationale, we apply it here to find that the Respondent has
violated Section 8(a)(1) of the Act by requiring its employees to agree to resolve
all employment-related claims through individual arbitration, and by taking steps
to enforce the unlawful agreements in Federal district court when the Charging
Party and three other employees filed a collective claim against the Respondent 35
under the Fair Labor Standards Act. [footnotes omitted]
As can be seen from the above, the Board, in card parlance, “doubled down” on its D. R.
Horton, supra, case rationale. The Board in Murphy Oil, supra, clearly and expressly reaffirmed
D. R. Horton, concluding it’s decision was straightforward, clearly articulated and well 40
supported and noted, with due respect to the courts that have rejected its D. R. Horton rationale,
it would adhere to it and protect workers’ core substantive rights under the Act. The Board in
Murphy Oil expressly concluded an employer violates Section 8(a)(1) of the Act by requiring, as
is the case here, employees to waive their substantive right to collectively pursue employment-
related claims in all forums, arbitral and judicial. The Board also concluded its views and 45
rationale were consistent with well-established interpretation of the Act and not in conflict with
JD(ATL)–09–15
12
the Federal Arbitration Act. The Board specifically explained its rationale in light of the decision
of the Fifth Circuit, the only Federal appellate court to have examined D. R. Horton directly on
review, and, to have articulated its view the Board erred in D. R. Horton. The Board opined the
Fifth Circuit understood D. R. Horton as simply another in a series of cases to be decided under
the established framework of the Supreme Court’s Federal Arbitration Act jurisprudence, and not 5
as a case presenting novel questions. The Board expressed it could not accept the Fifth Circuit’s
conclusion that the pursuit of legal claims concertedly under Section 7 of the Act is not a
protected substantive right. The Board stated “we think the D. R. Horton Board was clearly
correct when it observed that the ‘right to engage in collective action—including collective legal
action—is the core substantive right protected by the NLRA and is the foundation on which the 10
Act and Federal labor policy rest’”
In summary, I find the Hospital has violated and continues to violate Section 8(a)(1) of
the Act by maintaining its arbitration agreements that requires all its employees to waive their
substantive right to collectively pursue employment-related claims in all forums, arbitral and 15
judicial.
I also find the Hospital violated Section 8(a)(1) of the Act by filing petitions to compel
individual arbitration by Ortega and Cardona in response to class action claims filed on April 14
by Ortega and Cardona in San Diego County Court alleging wage-and-hour claims against the 20
Hospital under the California Labor Code. It is well established an employer’s enforcement of
an unlawful rule, such as the mandatory arbitration agreement rules at issue here, independently
violates the Act. Cellular Sales of Missouri, LLC, 362 NLRB No. 27, slip op at 2 (2015) (an
employer’s enforcement of an unlawful rule, including a mandatory arbitration policy
independently violates Section 8(a)(1) ).25
CONCLUSIONS OF LAW
1. The Respondent is an employer within the meaning of Section 2(2), (6), and (7) of
the Act.30
2. By maintaining a mandatory arbitration agreement that employees reasonably
would believe bars them from filing charges with the National Labor Relations Board, and by
maintaining and/or enforcing its mandatory arbitration agreements under which employees are
compelled, as a condition of employment, to waive the right to maintain class or collective 35
actions in all forums, whether arbitral or judicial, the Hospital has engaged in unfair labor
practices affecting commerce within the meaning of Section 2(6) and (7) of the Act, and has
violated Section 8(a)(1) of the Act.
REMEDY40
Having found the Hospital has engaged in certain unfair labor practices, I recommend it
be ordered to cease and desist and to take certain affirmative action designed to effectuate the
policies of the Act. Consistent with the Board’s usual practice in cases involving unlawful
litigation, I recommend the Hospital be ordered to reimburse Cardona and Ortega for all 45
reasonable expenses and legal fees, with interest, incurred in opposing the Hospital’s unlawful
JD(ATL)–09–15
13
motion to dismiss their collective wage-and-hour claims under the California Labor Code and to
compel individual arbitration. See Bill Johnson’s Restaurants, Inc. v. NlRB, 461 U.S. 731, 747
(1983) (“If a violation is found, the Board may order the employer to reimburse the employees
whom he had wrongfully sued for their attorneys’ fees and other expenses” as well as “any other
proper relief that would effectuate the policies of the Act.”). Interest shall be computed in the 5
manner prescribed in New Horizons, 283 NLRB 1173 (1987), compounded daily as prescribed in
Kentucky River Medical Center, 356 NLRB No. 8 (2010). See Teamsters Local 776 (Rite Aid
Corp.), 305 NLRB 832, 835 fn. 10 (1991), enfd. 973 F.2d 230 (3d Cir. 1992), cert. denied 507
U.S. 959 (1993) (“[I]n make-whole orders for suits maintained in violation of the Act, it is
appropriate and necessary to award interest on litigation expenses.”), I recommend the Hospital 10
also be ordered to rescind or revise its Mediation and Arbitration Agreement and its Mutual
Agreement to Arbitrate and to notify employees and the San Diego California Superior Court
that it has done so, and to inform the Court that it no longer opposes Cardona’s and Ortega’s
claims on the basis of either or both of the arbitration agreements.
15
ORDER
The Hospital, Prime Healthcare Paradise Valley, LLC, National City, California, its
officers, agents, successors, and assigns, shall
20
1. Cease and desist from
(a) Maintaining a mandatory arbitration agreement that employees reasonably
would believe bars or restricts the right to file charges with the Board.
25
(b) Maintaining and/or enforcing mandatory arbitration agreements that
require employees, as a condition of employment, to waive the right to maintain class or
collective actions in all forums, whether arbitral or judicial.
(c) In any like or related manner interfering with, restraining, or coercing 30
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.
35
(a) Rescind the Mediation and Arbitration Agreement and the Mutual
Agreement to Arbitrate in all of its forms, or revise all of its forms to make clear to employees
that the Mediation and Arbitration Agreement and/or the Mutual Agreement to Arbitrate do not
constitute waivers of their right to maintain employment related joint, class, or collective actions
in all forums, and that it does not restrict employees’ right to file charges with the Board.40
(b) Notify all applicants and current and former employees who were required
to sign the Mediation and Arbitration Agreement and/or the Mutual Agreement to Arbitrate that
the agreements have been rescinded or revised and, if revised, provide them a copy of the revised
agreement.45
JD(ATL)–09–15
14
(c) Notify the San Diego County California Superior Court, in the case
Stephene Ortega and Richard Cardona vs. Prime Healthcare Paradise Valley LLC, Case No. 37-
2014-00011240-CU-OE-CTL, that it has rescinded or revised its Mediation and Arbitration
Agreement and its Mutual Agreement to Arbitrate upon which it based its motion to compel
arbitration on an individual rather than classwide basis of Ortega’s and Cardona’s claims, 5
including their wage-and-hour claims under the California Labor Code, and inform the Court that
it no longer opposes Ortega’s and Cardona’s actions on the basis of one or both of those
arbitration agreements.
(d) In the manner set forth in the remedy section of this decision, reimburse 10
Ortega and Cardona for any reasonable attorneys’ fees and litigation expenses they may have
incurred in opposing the Hospital’s motion to compel arbitration on an individual rather than
classwide basis.
(e) Within 14 days after service by the Region, post at its National City, 15
California facility, copies of the attached notice marked “Appendix.”4 Copies of the notice, on
forms provided by the Regional Director for Region 21, after being signed by the Hospital’s
authorized representative, shall be posted by the Hospital 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, notices shall be distributed electronically, such as 20
by email, posting on an intranet or an internet site, or other electronic means, if the Hospital
customarily communicates with its employees by such means. Reasonable steps shall be taken
by the Hospital to ensure that the notices are not altered, defaced, or covered by any other
material. In the event that, during the pendency of these proceedings, the Hospital has gone out
of business or closed the facility involved in these proceedings, the Hospital shall duplicate and 25
mail, at its own expense, a copy of the notice marked “Appendix” to all current employees and
former employees employed by the Hospital at any time since January 31, 2014.
(f) Within 21 days after service by the Region, file with the Regional Director
for Region 21 a sworn certification of a responsible official on a form provided by the Region 30
attesting to the steps that the Hospital has taken to comply.
Dated, Washington, D.C. May 8, 2015
35
______________________________
William Nelson Cates
Associate Chief Judge40

4 If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading
“Posted by Order of the National Labor Relations Board” shall read “Posted Pursuant to a Judgment of the
United States Court of Appeals Enforcing an Order of the National Labor Relations Board.”
JD(ATL)–09–15
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
The National Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT maintain a mandatory arbitration agreement that our employees would
reasonably believe bars or restricts their right to file charges with the Board
.
WE WILL NOT maintain and/or enforce our Mediation and Arbitration Agreement and/or the
Mutual Agreement to Arbitrate that requires our employees, as a condition of employment, to
waive the right to maintain class or collective actions in all forums, whether arbitral or judicial.
WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the
exercise of the rights listed above.
WE WILL rescind our Mediation and Arbitration Agreement and the Mutual Agreement to
Arbitrate in all of its forms, or revise it in all of its forms to make clear that the Mediation and
Arbitration Agreement and the Mutual Agreement to Arbitrate do not constitute a waiver of your
right to maintain employment-related joint, class, or collective actions in all forums, and that it
does not restrict your right to file charges with the Board.
WE WILL notify all applicants and current and former employees who were required to sign
our Mediation and Arbitration Agreement and/or our Mutual Agreement to Arbitrate forms that
the forms have been rescinded or revised and, if revised, provide them a copy of the revised
agreement.
WE WILL notify the San Diego County California Superior Court, in the case Stephene Ortega
and Richard Cardona vs. Prime Healthcare Paradise Valley LLC, Case No. 37-2014-00011240-
CU-OE-CTL, that we have rescinded or revised our Mediation and Arbitration Agreement and
our Mutual Agreement to Arbitrate, upon which we based our motion to compel arbitration on an
individual rather than a class-wide basis the claims therein, including the wage-and-hour claims
under the California Labor Code, and WE WILL inform the court we no longer oppose Ortega’s
and Cardona’s claims based on those arbitration agreements.
JD(ATL)–09–15
WE WILL reimburse Ortega and Cardona for any reasonable attorneys’ fees and litigation
expenses they may have incurred in opposing our motion to compel arbitration on an individual
rather than a classwide basis their claims, including their wage-and-hour claims under the
California Labor Code.
PRIME HEALTHCARE PARADISE VALLEY, LLC
(Employer)
Dated: ________________ By: ________________________________________________
(Representative) (Title)
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under
the Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s
Regional Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
888 South Figueroa Street, 9th Floor, Los Angeles, CA 90017-5449
(213) 894-5200, Hours: 8:30 a.m. to 5 p.m.
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/21-CA-133781 or by using the QR code
below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations Board,
1099 14th Street, N.W., Washington, D.C. 20570, or by calling (202) 273-1940.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST NOT BE
ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE OR
COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL OFFICE’S
COMPLIANCE OFFICER, (213) 894-5184.