NEWS ITEM

NLRB Issues Complaint Against Employer's Class Action Prohibition

Alleges that 24 Hour Fitness's Mandatory Arbitration Clause Violates the NLRA, Despite 30-Day Opt-Out Provision

April 30, 2012 -- The NLRB General Counsel issued a Complaint today against 24 Hour Fitness, alleging that the company violated its employees' Section 7 right to engage in concerted activity by prohibiting those employees from filing or or joining class and collective actions to enforce workplace rights.

Following closesly on the heels of the Board's January 3, 2012 decision in D.R. Horton, Inc., the new Complaint rejects the employer's defense that its employees voluntarily waived their right to pursue class and collective actions by failing to opt out of the company's mandatory arbitration agreement within the first 30 days of their employment. Under established Board case law (much of which was cited in D.R. Horton, Inc.), employers may not pressure, induce, or coerce workers to waive their core Section 7 rights. In this case, 24 Hour Fitness allowed opt outs only during the first 30 days of its workers' employment, when its new employees would be least likely to take the affirmative steps necessary to opt out under the company's stated procedures, risking retaliation and suspicion by identifying themselves as potential class action litigants who chose to reject the company's favored individual arbitration procedure in order to preserve their right to bring a class action in court if their rights were later violated.

Altshuler Berzon LLP attorneys Michael Rubin and Caroline Cincotta assisted the Charging Party in preparing his charge in this matter, and represent the SEIU as an amicus in support of the Charging Party. Altshuler Berzon LLP also represented the SEIU as amicus in the related predecessor cases of Neiman Marcus (which was settled by the Board's prior General Counsel over the union's objections) and D.R. Horton, Inc. (which is now pending on cross-appeals in the Fifth Circuit).

The Complaint in 24 Hour Fitness identifies seven pending state and federal cases in which the company recently sought to enforce its individual arbitration agreement against workers seeking to pursue wage and discrimination claims on a class or collective action basis. A hearing before the ALJ on is scheduled for June 11, 2012. However, the SEIU and the Charging Party are continuing to urge the General Counsel to pursue Section 10(j) injunctive relief against the company in court, to enjoin it from continuing to enforce the prohibition against class actions and to require it to drop all opposition to classwide relief in those pending cases.

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