NLRB Orders Samsung to Stop Use of Employment Agreement Waiving Right to Sue

March 4, 2016, 8:00AM. By The National Trial Lawyers

The National Labor Relations Board has ordered Samsung to refrain from coercively interrogating employees and to cease the use of an agreement to arbitrate claims.

The mutual agreement required employees to waive their rights to pursue class or collective actions as a condition of employment.

The ruling comes after an employee started speaking with other employees about her plans to file a lawsuit against Samsung for unpaid wages.

Employee Jorgie Franks asked other employees if they would be interested in joining a lawsuit with her because they worked “too many hours compared to what they were being paid.” Franks determined that based on the hours she was working and her income, she was being paid minimum wage.

Agreement condition of employment

Frank’s attempt to join other employees in a lawsuit against Samsung went against Samsung’s Mutual Agreement to Arbitrate Claims that required employees, as a condition of their employment, to waive their right to pursue any class or collective actions against Samsung, even through arbitration.

The agreement stated that neither Samsung nor the employee could litigate any action against the other except through individual arbitration.

The NLRB panel affirmed an administrative judge’s finding that Samsung’s practice of having new employees sign a Mutual Agreement to Arbitrate Claims as a condition of employment violated the National Labor Relations Act.

The NLRB ordered Samsung to rescind all mutual agreements and give notice to all employees that it will no longer maintain or enforce the Mutual agreements to Arbitrate claims.

Coercive interrogation

The NLRB also ordered that Samsung stop the practice of coercively interrogating employees about any protected concerted activities after finding that a human resources administrator unlawfully interrogated Franks on two occasion regarding her plans to file a lawsuit against Samsung and her discussion about it with other employees.

The human resource manager called Franks and informed her that other employees “felt very uncomfortable” with her conversation and told her not to talk to other employees about her concerns, and instead contact the human resource manager directly.

After Franks discussed the potential lawsuit with another employee, the human resource manager contacted her again by email asking if anything changed after their prior conversation and asking why she did not follow her request that she not discuss the lawsuit with other employees.

Franks testified that she was “nervous and tried to be vague in her response” and informed the manager that she was uncomfortable further discussing the situation.

Coerced interrogation

The NLRB determined that the human resource manager had interrogated Franks on both occasions, finding that the manager’s interrogation “coerce[d] the employee…so that he or she would feel restrained from exercising rights protected” by the National Labor Relations Act.

The NLRB panel determined that the manager’s conversation and email to Franks were “calculated to elicit a response from Franks” to gain information about her bringing a collective action lawsuit.

The NLRB ordered Samsung to cease and desist from interrogating employees or interfering with or restraining employees from exercising their guaranteed right to act with other employees in protected concerted activities. The Board further ordered Samsung reimburse plaintiff’s attorneys fees and litigation expenses.

The case is Samsung Electronics America Inc. f/k/a Samsung Telecommunications America LLC and Jorgie Franks, case number 12-CA-145083, before the National Labor Relations.