Price-Simms, Inc.: Legal Case Study

D.C. Circuit sided with the National Labor Review Board (NLRB) in the fight over a Toyota dealership’s mandatory arbitration policy. The court found that the provision to bar workers from pursuing class litigation is illegal. The Law Office of Blumenthal, Nordrehaug & Bhowmik originally filed the NLRB unfair labor practice charge on behalf of Richard Vogel.

Legal scholars from various academic organizations including University of Illinois, the University of California, Los Angeles and the University of Texas presented arguments that Price-Simms, Inc.’s use of a class action waiver in their employment agreement should be barred. Arguments were based on National Labor Relations Act of 1935, and the Norris-LaGuardia Act of 1932. Price-Simms, Inc. is the company that sells and services vehicles under the name Toyota Sunnyvale located out of Sunnyvale, California.

The university professors pointed out that Norris-LaGuardia prohibits the enforcement of an agreement that blocks employees from joining together in an attempt to protect their own rights in the workplace. According to this argument, the
By making the employment agreement mandatory, the company removed the right for their employees to pursue any collective or class actions. The issue stems from the complaint made by Vogel to the NLRB after he was made to arbitrate a proposed class action over wage-and-hour violations in California state court. The Price-Simms’ arbitration agreement was found in violation of the NLRA in late 2015 and the company was ordered to revise their related policies. The Toyota dealership filed an appeal a month after the original findings claiming that the order incorrect under the law and unsupported by the record. The NLRB filed a cross appeal. The two appeals were consolidated in January 2016 (Price-Simms Inc. v. NLRB, no. 15-1457, U.S. Court of Appeals for the District of Columbia