Fatemeh Johnmohammadi v. Bloomingdale's, Inc. , 755 F.3d 1072 ( 2014 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
FATEMEH JOHNMOHAMMADI, No. 12-55578
individually and on behalf of other
persons similarly situated, D.C. No.
Plaintiff-Appellant, 2:11-cv-06434-
GW-AJW
v.
BLOOMINGDALE’S, INC., OPINION
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of California
George H. Wu, District Judge, Presiding
Argued and Submitted
December 6, 2013—Pasadena, California
Filed June 23, 2014
Before: John T. Noonan and Paul J. Watford, Circuit
Judges, and William E. Smith, Chief District Judge.*
Opinion by Judge Watford
*
The Honorable William E. Smith, Chief District Judge for the U.S.
District Court for the District of Rhode Island, sitting by designation.
2 JOHNMOHAMMADI V. BLOOMINGDALE’S
SUMMARY**
Arbitration / Class Action
The panel affirmed the district court’s order granting the
motion of Bloomingdale’s, Inc. to compel arbitration under
the Federal Arbitration Act, and dismissing without prejudice
the putative class action brought by a former employee to
recover unpaid overtime wages.
The arbitration agreement, contained in Bloomingdale’s
employment documents, provided that employees who fail to
opt out waive their right to pursue employment-related claims
on a collective basis in any forum, judicial or arbitral.
The panel held that the district court correctly held that
the arbitration agreement was valid, and under the Federal
Arbitration Act it must be enforced according to its terms.
The panel held that the employee had the right to opt out of
the arbitration agreement, and had she done so she would be
free to pursue this class action in court. The panel further
held that having freely elected to arbitrate employment-
related disputes on an individual basis, without interference
from Bloomingdale’s, the employee could not claim that
enforcement of the arbitration agreement violated either the
Norris-LaGuardia Act or the National Labor Relations Act.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
JOHNMOHAMMADI V. BLOOMINGDALE’S 3
COUNSEL
Dennis F. Moss (argued), Sherman Oaks, California; Ira
Spiro, Spiro Moore, LLP, Los Angeles, California; Sahag
Majarian II, Law Offices of Sahag Majarian II, Tarzana,
California, for Plaintiff-Appellant.
David E. Martin (argued) and Catherine E. Sison, Macy’s
Inc., St. Louis, Missouri; John S. Curtis, Law Offices of Julia
Azrael, North Hollywood, California, for Defendant-
Appellee.
Andrew J. Pincus (argued), Evan M. Tager, Archis A.
Parasharami, and Richard B. Katskee, Mayer Brown LLP,
Washington, D.C.; Robin S. Conrad and Shane B. Kawka,
National Chamber Litigation Center, Inc., Washington, D.C.,
for Amicus Curiae Chamber of Commerce of the United
States of America.
Cliff Palefsky and Scott Stillman, McGuinn, Hillsman &
Palefsky, San Francisco, California, for Amicus Curiae
California Employment Lawyers Association.
Jeffrey A. Berman and James M. Harris, Seyfarth Shaw LLP,
Los Angeles, California, for Amicus Curiae California
Employment Law Council.
4 JOHNMOHAMMADI V. BLOOMINGDALE’S
OPINION
WATFORD, Circuit Judge:
This is a class action brought by plaintiff Fatemeh
Johnmohammadi to recover unpaid overtime wages from
defendant Bloomingdale’s, Inc., her former employer. All of
Johnmohammadi’s claims arise under state law and are
asserted on behalf of similarly situated current and former
California employees. Johnmohammadi initially filed the
action in state court, but Bloomingdale’s removed the action
to federal court under the Class Action Fairness Act of 2005.
See 28 U.S.C. §§ 1332(d)(2), 1453(b).
Once in federal court, Bloomingdale’s moved to compel
arbitration under the Federal Arbitration Act (FAA), 9 U.S.C.
§ 1 et seq., and asked the district court to stay the action
pending completion of arbitration. The court granted the
motion to compel. It determined that shortly after being hired
by Bloomingdale’s, Johnmohammadi entered into a valid,
written arbitration agreement and that all of her claims fall
within the scope of that agreement.
In these circumstances § 3 of the FAA, 9 U.S.C. § 3,
seems to direct that the action “shall” be stayed pending
completion of arbitration, as two other circuits have held.
Lloyd v. Hovensa, LLC, 369 F.3d 263, 268–69 (3d Cir. 2004);
Adair Bus Sales, Inc. v. Blue Bird Corp., 25 F.3d 953, 955
(10th Cir. 1994). We have held that, notwithstanding the
language of § 3, a district court may either stay the action or
dismiss it outright when, as here, the court determines that all
of the claims raised in the action are subject to arbitration.
Sparling v. Hoffman Constr. Co., 864 F.2d 635, 638 (9th Cir.
1988). The choice matters for purposes of appellate
JOHNMOHAMMADI V. BLOOMINGDALE’S 5
jurisdiction: An order compelling arbitration and staying the
action isn’t immediately appealable, 9 U.S.C. § 16(b)(1)–(2);
Green Tree Fin. Corp.-Ala. v. Randolph, 531 U.S. 79, 87 n.2
(2000), but an order compelling arbitration and dismissing the
action is. § 16(a)(3); Green Tree, 531 U.S. at 89. The district
court chose to dismiss Johnmohammadi’s action without
prejudice, so we have jurisdiction to hear this appeal. See
Interactive Flight Techs., Inc. v. Swissair Swiss Air Transp.
Co., 249 F.3d 1177, 1179 (9th Cir. 2001).
The relevant facts aren’t in dispute. When
Bloomingdale’s hired Johnmohammadi as a sales associate,
she received a set of documents describing the company’s
dispute resolution program. Those documents informed her
that she agreed to resolve all employment-related disputes
through arbitration unless she returned an enclosed form
within 30 days electing, as the form put it, “NOT to be
covered by the benefits of Arbitration.” Johnmohammadi did
not return the opt-out form. She does not contest the district
court’s findings that she made a fully informed and voluntary
decision, and that no threats of termination or retaliation were
made to influence her decision. By not opting out within the
30-day period, she became bound by the terms of the
arbitration agreement. See Circuit City Stores, Inc. v. Ahmed,
283 F.3d 1198, 1199–1200 (9th Cir. 2002).
The arbitration agreement is quite detailed, but the
provision that matters here is the one that forbids arbitration
on a class-wide basis: “The Arbitrator shall not consolidate
claims of different Associates into one (1) proceeding, nor
shall the Arbitrator have the power to hear an arbitration as a
class action . . . .” Employees who fail to opt out waive their
right to pursue employment-related claims on a collective
basis in any forum, judicial or arbitral. The only question
6 JOHNMOHAMMADI V. BLOOMINGDALE’S
before us is whether this provision is enforceable; if it is,
Johnmohammadi may not proceed with this action.
Johnmohammadi can’t argue that the class-action waiver
is unenforceable under California law. See AT&T Mobility
LLC v. Concepcion, 131 S. Ct. 1740, 1750–51 (2011). She
argues instead that federal law renders the waiver
unenforceable, relying on provisions in two federal labor
statutes. The first statute, the Norris-LaGuardia Act,
29 U.S.C. § 101 et seq., states that, as a matter of public
policy, employees “shall be free from the interference,
restraint, or coercion of employers of labor, or their agents, in
the designation of . . . representatives [of their own choosing]
or in self-organization or in other concerted activities for the
purpose of collective bargaining or other mutual aid or
protection.” § 102 (emphasis added).1 The Act declares that
1
Section 102 currently provides:
In the interpretation of this chapter and in determining
the jurisdiction and authority of the courts of the United
States, as such jurisdiction and authority are defined
and limited in this chapter, the public policy of the
United States is declared as follows:
Whereas under prevailing economic conditions,
developed with the aid of governmental authority for
owners of property to organize in the corporate and
other forms of ownership association, the individual
unorganized worker is commonly helpless to exercise
actual liberty of contract and to protect his freedom of
labor, and thereby to obtain acceptable terms and
conditions of employment, wherefore, though he should
be free to decline to associate with his fellows, it is
necessary that he have full freedom of association,
self-organization, and designation of representatives of
his own choosing, to negotiate the terms and conditions
JOHNMOHAMMADI V. BLOOMINGDALE’S 7
any “undertaking or promise in conflict with the public policy
declared in section 102 . . . shall not be enforceable in any
court of the United States.” § 103.
The second statute, the National Labor Relations Act
(NLRA), 29 U.S.C. § 151 et seq., says essentially the same
thing. Section 7 of the NLRA grants covered employees, see
§ 152(3), certain substantive rights, among them the right “to
engage in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection.”
§ 157 (emphasis added).2 Section 8(a)(1), in turn, makes it
of his employment, and that he shall be free from the
interference, restraint, or coercion of employers of
labor, or their agents, in the designation of such
representatives or in self-organization or in other
concerted activities for the purpose of collective
bargaining or other mutual aid or protection; therefore,
the following definitions of and limitations upon the
jurisdiction and authority of the courts of the United
States are enacted.
29 U.S.C. § 102.
2
Section 7 currently provides:
Employees shall have the right to self-organization, to
form, join, or assist labor organizations, to bargain
collectively through representatives of their own
choosing, and to engage in other concerted activities for
the purpose of collective bargaining or other mutual aid
or protection, and shall also have the right to refrain
from any or all of such activities except to the extent
that such right may be affected by an agreement
requiring membership in a labor organization as a
8 JOHNMOHAMMADI V. BLOOMINGDALE’S
illegal for an employer “to interfere with, restrain, or coerce
employees in the exercise of rights guaranteed in section
157.” § 158(a)(1).
Johnmohammadi contends that filing this class action on
behalf of her fellow employees is one of the “other concerted
activities” protected by the Norris-LaGuardia Act and the
NLRA. There is some judicial support for her position. See,
e.g., Eastex, Inc. v. NLRB, 437 U.S. 556, 565–66 (1978);
Brady v. Nat’l Football League, 644 F.3d 661, 673 (8th Cir.
2011); Mohave Elec. Coop, Inc. v. NLRB, 206 F.3d 1183,
1189 (D.C. Cir. 2000); Salt River Valley Water Users’ Ass’n
v. NLRB, 206 F.2d 325, 328 (9th Cir. 1953). But we need not
decide whether Johnmohammadi has correctly interpreted this
statutory phrase. To prevail, she must still show that
Bloomingdale’s interfered with, restrained, or coerced her in
the exercise of her right to file a class action. In our view,
Bloomingdale’s did none of these things.
We can quickly dismiss any notion that Bloomingdale’s
coerced Johnmohammadi into waiving her right to file a class
action. Bloomingdale’s did not require her to accept a class-
action waiver as a condition of employment, as was true in In
re D.R. Horton, Inc., 357 N.L.R.B. No. 184, 2012 WL 36274(Jan. 3, 2012), enforcement denied in part, 737 F.3d 344 (5th
Cir. 2013). Bloomingdale’s gave her the option of
participating in its dispute resolution program, which would
require her to arbitrate any employment-related disputes on
an individual basis. As the district court found,
condition of employment as authorized in section
158(a)(3) of this title.
29 U.S.C. § 157.
JOHNMOHAMMADI V. BLOOMINGDALE’S 9
Johnmohammadi was fully informed about the consequences
of making that election, and she did so free of any express or
implied threats of termination or retaliation if she decided to
opt out of arbitration. She has not challenged those findings.
There is thus no basis for concluding that Bloomingdale’s
coerced Johnmohammadi into waiving her right to file a class
action.
Nor is there any basis for concluding that Bloomingdale’s
interfered with or restrained Johnmohammadi in the exercise
of her right to file a class action. If she wanted to retain that
right, nothing stopped her from opting out of the arbitration
agreement. Bloomingdale’s merely offered her a choice:
resolve future employment-related disputes in court, in which
case she would be free to pursue her claims on a collective
basis; or resolve such disputes through arbitration, in which
case she would be limited to pursuing her claims on an
individual basis. In the absence of any coercion influencing
the decision, we fail to see how asking employees to choose
between those two options can be viewed as interfering with
or restraining their right to do anything.
Johnmohammadi attempts to analogize the choice
Bloomingdale’s offered her to other types of employer
misconduct that violate § 8(a)(1) of the NLRA. Specifically,
she invokes cases in which the employer offered its
employees a benefit, such as a raise, in exchange for the
employee’s agreement to refrain from protected activity. See,
e.g., Nat’l Licorice Co. v. NLRB, 309 U.S. 350, 360 (1940);
NLRB v. Stone, 125 F.2d 752, 754, 756 (7th Cir. 1942); In re
Ishikawa Gasket Am., Inc., 337 N.L.R.B. 175, 175–76 (2001).
She contends Bloomingdale’s did the same thing by offering
employees the “benefit” of resolving all employment-related
10 JOHNMOHAMMADI V. BLOOMINGDALE’S
disputes through arbitration in exchange for the employee’s
agreement not to file or join a class action.
To prevail on this argument, Johnmohammadi would need
to show that offering the arbitration agreement constitutes
“conduct immediately favorable to employees,” which
Bloomingdale’s undertook with the express purpose of
impinging upon its employees’ “freedom of choice” in
deciding whether to waive or retain their right to participate
in class litigation. NLRB v. Exch. Parts Co., 375 U.S. 405,
409 (1964); see also NLRB v. Anchorage Times Pub’g Co.,
637 F.2d 1359, 1367 (9th Cir. 1981). We don’t doubt that
offering the arbitration agreement could be viewed as conduct
favorable to employees, since the benefits of having an
arbitral forum available to resolve workplace disputes can be
substantial. For certain types of disputes the speed,
informality, and lower costs of arbitration provide real
advantages over litigating in court. See Concepcion, 131 S.
Ct. at 1749, 1751. But arbitration comes with disadvantages
of its own, which, depending on the nature of the dispute,
may make it a less attractive forum for employees. At the
outset of the employment relationship, before an employee
knows what types of workplace-related disputes she may later
encounter, the benefits (and costs) of prospectively agreeing
to arbitrate all such disputes are decidedly uncertain, even
putting aside the class-action waiver. We don’t think the
offer of those benefits is of such a character that it would tend
to interfere with an employee’s freedom of choice about
whether to forgo future participation in class actions. And
Johnmohammadi has offered no evidence that
Bloomingdale’s offered those benefits with the express
purpose of curtailing its employees’ freedom of choice.
Indeed, it would be difficult for Johnmohammadi to make
such a showing here, given that the presumed benefits of
JOHNMOHAMMADI V. BLOOMINGDALE’S 11
agreeing to arbitrate all employment-related disputes would
largely be lost if the agreement permitted class-wide
arbitration. See id.Johnmohammadi also argues that, whether procured by
way of inducement or not, an employee may never waive the
right to participate in class litigation by negotiating an
individual contract with her employer. She relies principally
on J. I. Case Co. v. NLRB, 321 U.S. 332 (1944), but that case
does not support the broad proposition she urges us to adopt.
The Court held in J. I. Case that an employer may not
negotiate individual contracts with employees and then refuse
to engage in collective bargaining with the employees’
designated union representatives on the ground that doing so
would violate the terms of the individual contracts. Id. at
337. The Court reasoned that any collective bargaining
agreement reached between the union and the employer
would necessarily supersede an employee’s individual
contract, to the extent that the terms of the collective
bargaining agreement were more favorable to the employee.
Id. at 338–39. But the Court also stressed that nothing
prevents an employee from making an individual contract
with her employer, “provided it is not inconsistent with a
collective agreement or does not amount to or result from or
is not part of an unfair labor practice.” Id. at 339. Here,
Johnmohammadi was not covered by a collective bargaining
agreement, and for the reasons discussed above, we do not
believe her decision to enter into the arbitration agreement
amounted to or resulted from an unfair labor practice.
In sum, Johnmohammadi had the right to opt out of the
arbitration agreement, and had she done so she would be free
to pursue this class action in court. Having freely elected to
arbitrate employment-related disputes on an individual basis,
12 JOHNMOHAMMADI V. BLOOMINGDALE’S
without interference from Bloomingdale’s, she cannot claim
that enforcement of the agreement violates either the Norris-
LaGuardia Act or the NLRA. The district court correctly
held that the arbitration agreement is valid. Under the FAA
it must be enforced according to its terms. See Am. Express
Co. v. Italian Colors Rest., 133 S. Ct. 2304, 2309 (2013).
AFFIRMED.