• Nibbling Away at Concepcion
  • January 20, 2012 | Author: Mark W. Batten
  • Law Firm: Proskauer Rose LLP - Boston Office
  • In AT&T Mobility v. Concepcion, 563 U.S. ----, 131 S. Ct. 1740 (2011), the Supreme Court upheld a waiver of class arbitration in a consumer contract.  Four recent moves have begun the process of responding to and exploring the boundaries of the Court's decision.

    First, in D.R. Horton, Inc., 357 NLRB No. 184 (Jan. 6, 2011), the National Labor Relations Board held that a nonunion employer's mandatory arbitration agreement, which precluded any class claims, violated Section 7 of the National Labor Relations Act.  Second, FINRA has proposed a rule to affirm its current practice of excluding collective action claims from its arbitration procedures.

    The other two decisions of interest are two Southern District of New York decisions that explore the effect of Concepcion on claims under the FLSA.  In Raniere v. Citigroup, Inc., No. 11-2448 [pdf], Judge Sweet, applying pre-Concepcion precedent even though it was decided in November, months after Concepcion, has held that the Supreme Court's decision does not impinge on the Second Circuit's earlier AMEX decisions holding that waivers of FLSA collective action rights were unenforceable.  But in LaVoice v. UBS Financial Services, No. 11-2308 [pdf], Judge Jones expressly refused to follow Raniere and D.R. Horton, holding that Concepcion precludes any argument that the FLSA's collective action provisions must trump the FAA.  Judge Jones ordered an FLSA claim to arbitration and enforced the collective action waiver.  But the court was swayed by the relatively high alleged value of LaVoice's individual overtime claim -- between $127,000 and $132,000, plaintiff claimed -- and the provision in the arbitration agreement that permitted recovery of attorneys' fees.

    The Supreme Court may have to weigh in on these issues again before we have any clear picture.  The D.R. Horton case is the most interesting of these, since it poses the broadest threat to the Concepcion decision in the employment context.