5th Circuit Upholds Employer’s Class Action Waiver

Convergys Corporation v. National Labor Relations Board, 866 F.3d 635 (5th Cir. 2017), arose out of a class action wavier that Convergys required job applicants to sign.  The waiver read as follows:

I further agree that I will pursue any claim or lawsuit relating to my employment with Convergys (or any of its subsidiaries or related entities) as an individual, and will not lead, join, or serve as a member of a class or group of persons bringing such a claim or lawsuit.

The General Counsel for the National Labor Relations Board (NLRB) issued a complaint alleging that this waiver violated the National Labor Relations Act (NLRA). The Administrative Law Judge ruled in favor of the NLRB, finding that the waiver violated the NLRA’s guarantee in Section 7 of the right for employees “to engage in other concerted activities for the purpose of … other mutual aid or protection.”

The 5th Circuit held that the waiver did not violate Section 7 of the NLRA.  The court cited its earlier decisions holding that Section 7 does not create a substantive right to participate in class or collective actions.  The cases cited included D.R. Horton, Inc., 737 F.3d 344 (5th Cir.2013), where the court held that the use of class action procedures is not a substantive right.

The court noted that the Supreme Court may address the question of whether Section 7 creates a substantive right to participate in class actions when it issues its opinion in NLRB v. Murphy Oil USA, Inc., cert. granted, 137 S. Ct. 809 (2017).   

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