Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca7-15-02997/USCOURTS-ca7-15-02997-0/pdf.json

Nature of Suit Code: 710
Nature of Suit: Fair Labor Standards Act
Cause of Action: 

---

In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 15-2997

JACOB LEWIS,

Plaintiff-Appellee,

v.

EPIC SYSTEMS CORPORATION,

Defendant-Appellant.

____________________

Appeal from the United States District Court for the

Western District of Wisconsin.

No. 15-cv-82-bbc — Barbara B. Crabb, Judge.

____________________

ARGUED FEBRUARY 12, 2016 — DECIDED MAY 26, 2016

____________________

Before WOOD, Chief Judge, ROVNER, Circuit Judge, and 

BLAKEY, District Judge.*

WOOD, Chief Judge. Epic Systems, a health care software 

company, required certain groups of employees to agree to 

bring any wage-and-hour claims against the company only 

through individual arbitration. The agreement did not permit 

 * Of the Northern District of Illinois, sitting by designation. 

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collective arbitration or collective action in any other forum. 

We conclude that this agreement violates the National Labor 

Relations Act (NLRA), 29 U.S.C. §§ 151, et seq., and is also unenforceable under the Federal Arbitration Act (FAA), 9 U.S.C. 

§§ 1, et seq. We therefore affirm the district court’s denial of 

Epic’s motion to compel arbitration.

I

On April 2, 2014, Epic Systems sent an email to some of its

employees. The email contained an arbitration agreement 

mandating that wage-and-hour claims could be brought only 

through individual arbitration and that the employees 

waived “the right to participate in or receive money or any 

other relief from any class, collective, or representative proceeding.” The agreement included a clause stating that if the 

“Waiver of Class and Collective Claims” was unenforceable, 

“any claim brought on a class, collective, or representative action basis must be filed in a court of competent jurisdiction.” 

It also said that employees were “deemed to have accepted 

this Agreement” if they “continue[d] to work at Epic.” Epic 

gave employees no option to decline if they wanted to keep 

their jobs. The email requested that recipients review the 

agreement and acknowledge their agreement by clicking two 

buttons. The following day, Jacob Lewis, then a “technical 

writer” at Epic, followed those instructions for registering his 

agreement.

Later, however, Lewis had a dispute with Epic, and he did 

not proceed under the arbitration clause. Instead, he sued 

Epic in federal court, contending that it had violated the Fair 

Labor Standards Act (FLSA), 29 U.S.C. §§ 201, et seq. and Wisconsin law by misclassifying him and his fellow technical 

writers and thereby unlawfully depriving them of overtime 

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No. 15-2997 3

pay. Epic moved to dismiss Lewis’s claim and compel individual arbitration. Lewis responded that the arbitration clause violated the NLRA because it interfered with employees’ right 

to engage in concerted activities for mutual aid and protection 

and was therefore unenforceable. The district court agreed 

and denied Epic’s motion. Epic appeals, arguing that the district court erred in declining to enforce the agreement under

the FAA. We review de novo a district court’s decision to deny 

a motion to compel arbitration. Gore v. Alltel Commc’ns, LLC, 

666 F.3d 1027, 1033 (7th Cir. 2012).

II

A

Section 7 of the NLRA provides that “[e]mployees 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.” 29 U.S.C. § 157. Section 8 enforces Section 

7 unconditionally by deeming that it “shall be an unfair labor 

practice for an employer ... to interfere with, restrain, or coerce 

employees in the exercise of the rights guaranteed in [Section 

7].” Id. § 158(a)(1). The National Labor Relations Board is “empowered ... to prevent any person from engaging in any unfair 

labor practice ... affecting commerce.” Id. § 160(a). 

Contracts “stipulat[ing] ... the renunciation by the employees of rights guaranteed by the [NLRA]” are unlawful and 

may be declared to be unenforceable by the Board. Nat’l Licorice Co. v. NLRB, 309 U.S. 350, 365 (1940) (“[I]t will not be open 

to any tribunal to compel the employer to perform the acts, 

which, even though he has bound himself by contract to do 

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them, would violate the Board’s order or be inconsistent with 

any part of it[.]”); J.I. Case Co. v. NLRB, 321 U.S. 332, 337 (1944) 

(“Wherever private contracts conflict with [the Board’s] functions, they obviously must yield or the [NLRA] would be reduced to a futility.”). In accordance with this longstanding 

doctrine, the Board has, “from its earliest days,” held that 

“employer-imposed, individual agreements that purport to 

restrict Section 7 rights” are unenforceable. D. R. Horton, Inc., 

357 N.L.R.B. No. 184 at *5 (2012) (collecting cases as early as 

1939), enf’d in part and granted in part, D.R. Horton, Inc. v. NLRB, 

737 F.3d 344 (5th Cir. 2013). It has done so with “uniform judicial approval.” Id. (citing as examples NLRB v. Vincennes 

Steel Corp., 117 F.2d 169, 172 (7th Cir. 1941), NLRB v. Jahn & 

Ollier Engraving Co., 123 F.2d 589, 593 (7th Cir. 1941), and 

NLRB v. Adel Clay Products Co., 134 F.2d 342 (8th Cir. 1943)). 

Section 7’s “other concerted activities” have long been held 

to include “resort to administrative and judicial forums.” 

Eastex, Inc. v. NLRB, 437 U.S. 556, 566 (1978) (collecting cases). 

Similarly, both courts and the Board have held that filing a 

collective or class action suit constitutes “concerted activit[y]” 

under Section 7. See Brady v. Nat’l Football League, 644 F.3d 661, 

673 (8th Cir. 2011) (“[A] lawsuit filed in good faith by a group 

of employees to achieve more favorable terms or conditions 

of employment is‘concerted activity’ under § 7 of the National 

Labor Relations Act.”); Altex Ready Mixed Concrete Corp. v. 

NLRB, 542 F.2d 295, 297 (5th Cir. 1976) (same); Leviton Mfg. Co. 

v. NLRB, 486 F.2d 686, 689 (1st Cir. 1973) (same); Mohave Elec. 

Co-op., Inc. v. NLRB, 206 F.3d 1183, 1189 (D.C. Cir. 2000) (single 

employee’s filing of a judicial petition constituted “concerted 

action” under NLRA where “supported by fellow employees”); D. R. Horton, 357 N.L.R.B. No. 184, at *2 n.4 (collecting 

cases). This precedent is in line with the Supreme Court’s rule 

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recognizing that even when an employee acts alone, she may

“engage in concerted activities” where she “intends to induce 

group activity” or “acts as a representative of at least one 

other employee.” NLRB v. City Disposal Systems, Inc., 465 U.S. 

822, 831 (1984).

Section 7’s text, history, and purpose support this rule. In 

evaluating statutory language, a court asks first “whether the 

language at issue has a plain and unambiguous meaning with 

regard to the particular dispute in the case.” Exelon Generation 

Co., LLC v. Local 15, Int’l Bhd. of Elec. Workers, AFL-CIO, 676 

F.3d 566, 570 (7th Cir. 2012). In doing so, it “giv[es] the words 

used their ordinary meaning.” Lawson v. FMR LLC, 134 S. Ct. 

1158, 1165 (2014) (internal citation omitted). “Absent a clearly 

expressed legislative intention to the contrary, that language 

must ordinarily be regarded as conclusive.” Consumer Prod. 

Safety Comm'n v. GTE Sylvania, Inc., 447 U.S. 102, 108 (1980).

The NLRA does not define “concerted activities.” The ordinary meaning of the word “concerted” is: “jointly arranged,

planned, or carried out; coordinated.” Concerted, NEW OXFORD 

AMERICAN DICTIONARY 359 (3d ed. 2010). Activities are

“thing[s] that a person or group does or has done” or “actions 

taken by a group in order to achieve their aims.” Id. at 16. Collective or class legal proceedings fit well within the ordinary 

understanding of “concerted activities.”

The NLRA’s history and purpose confirm that the phrase 

“concerted activities” in Section 7 should be read broadly to 

include resort to representative, joint, collective, or class legal 

remedies. (There is no hint that it is limited to actions taken 

by a formally recognized union.) Congress recognized that,

before the NLRA, “a single employee was helpless in dealing 

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with an employer,” and “that union was essential to give laborers opportunity to deal on an equality with their employer.” NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1, 33 

(1937). In enacting the NLRA, Congress’s purpose was to “to 

equalize the bargaining power of the employee with that of 

his employer by allowing employees to band together in confronting an employer regarding the terms and conditions of 

their employment.” City Disposal Systems, 465 U.S. at 835. 

Congress gave “no indication that [it] intended to limit this 

protection to situations in which an employee’s activity and 

that of his fellow employees combine with one another in any 

particular way.” Id.

Collective, representative, and class legal remedies allow 

employees to band together and thereby equalize bargaining 

power. See Phillips Petrol. Co. v. Shutts, 472 U.S. 797, 809 (1985)

(noting that the class action procedure allows plaintiffs who 

would otherwise “have no realistic day in court” to enforce 

their rights); Harry Kalven, Jr. & Maurice Rosenfield, The Contemporary Function of the Class Suit, 8 U. CHI. L. REV. 684, 686

(1941) (noting that class suits allow those “individually in a 

poor position to seek legal redress” to do so, and that “an effective and inclusive group remedy” is necessary to ensure

proper enforcement of rights). Given Section 7’s intentionally 

broad sweep, there is no reason to think that Congress meant

to exclude collective remedies from its compass.

Straining to read the term through our most Epic-tinted

glasses, “concerted activity” might, at the most, be read as 

ambiguous as applied to collective lawsuits. But even if Section 7 were ambiguous—and it is not—the Board, in accordance with the reasoning above, has interpreted Sections 7 and 

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8 to prohibit employers from making agreements with individual employees barring access to class or collective remedies. See D. R. Horton, 357 N.L.R.B. No. 184, at *5. The Board’s 

interpretations of ambiguous provisions of the NLRA are “entitled to judicial deference.” Lechmere, Inc. v. NLRB, 502 U.S. 

527, 536 (1992). This Court has held that the Board’s views are 

entitled to Chevron deference, see Int’l Ass’n of Machinists & 

Aerospace Workers v. NLRB, 133 F.3d 1012, 1015 (7th Cir. 1998), 

and the Supreme Court has repeatedly cited Chevron in describing its deference to the NLRB’s interpretation of the 

NLRA, see, e.g., Lechmere, 502 U.S. at 536; NLRB v. United Food 

& Commercial Workers Union, Local 23, AFL-CIO, 484 U.S. 112, 

123 (1987). The Board’s interpretation is, at a minimum, a sensible way to understand the statutory language, and thus we 

must follow it. 

Epic argues that because the Rule 23 class action procedure did not exist in 1935, when the NLRA was passed, the 

Act could not have been meant to protect employees’ rights to 

class remedies. See FED. R. CIV. P. 23 (Committee Notes describing the initial 1937 version of the rule and later amendments). We are not persuaded. First, by protecting not only 

employees’ “right to self-organization, to form, join, or assist 

labor organizations, [and] to bargain collectively through representatives of their own choosing” but also “other concerted 

activities for the purpose of ... other mutual aid or protection,” 

Section 7’s text signals that the activities protected are to be 

construed broadly. 29 U.S.C. § 157 (emphasis added); see City 

Disposal Systems, 465 U.S. at 835. There is no reason to think 

that Congress intended the NLRA to protect only “concerted 

activities” that were available at the time of the NLRA’s enactment. 

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Second, the contract here purports to address all collective 

or representative procedures and remedies, not just class actions. Rule 23 may have been yet to come at the time of the 

NLRA’s passage, but it was not written on a clean slate. Other 

class and collective procedures had existed for a long time on 

the equity side of the court: permissive joinder of parties, for 

instance, had long been part of Anglo-American civil procedure and was encouraged in 19th-century federal courts. 

CHARLES ALAN WRIGHT & ARTHUR R. MILLER, 7 FEDERAL

PRACTICE AND PROCEDURE § 1651 (3d ed. 2015) (noting that 

federal equity courts encouraged permissive joinder of parties as early as 1872). As early as 1853, it was “well established” that representative suits were appropriate “where the 

parties interested are numerous, and the suit is for an object 

common to them all.” Smith v. Swormstedt, 57 U.S. 288, 302 

(1853) (allowing representative suit on behalf of more than

1,500 Methodist preachers). In fact, representative and collective legal procedures have been employed since the medieval 

period. See STEPHEN C. YEAZELL, FROM MEDIEVAL GROUP 

LITIGATION TO THE MODERN CLASS ACTION 38 (1987) (discussing group litigation in England occurring as early as 1199 

C.E.). The FLSA itself provided for collective and representative actions when it was passed in 1938. See, e.g., Williams v. 

Jacksonville Terminal Co., 315 U.S. 386, 390 n.3 (1942) (allowing 

suits by employees on behalf of “him or themselves and other 

employees similarly situated” (quoting FLSA, 29 U.S.C. 

§ 216(b))). 

Congress was aware of class, representative, and collective 

legal proceedings when it enacted the NLRA. The plain language of Section 7 encompasses them, and there is no evidence that Congress intended them to be excluded. Section 7’s 

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plain language controls, GTE Sylvania, 447 U.S. at 108, and

protects collective legal processes. Along with Section 8, it 

renders unenforceable any contract provision purporting to 

waive employees’ access to such remedies.

B

The question thus becomes whether Epic’s arbitration provision impinges on “Section 7 rights.” The answer is yes. 

In relevant part, the contract states “that covered claims 

will be arbitrated only on an individual basis,” and that employees “waive the right to participate in or receive money or 

any other relief from any class, collective, or representative 

proceeding.” It stipulates that “[n]o party may bring a claim 

on behalf of other individuals, and any arbitrator hearing [a] 

claim may not: (i) combine more than one individual’s claim 

or claims into a single case; (ii) participate in or facilitate notification of others of potential claims; or (iii) arbitrate any form 

of a class, collective or representative proceeding.” It notes 

that “covered claims” include any “claimed violation of wageand-hour practices or procedures under local, state, or federal 

statutory or common law.” It thus combines two distinct 

rules: first, any wage-and-hour dispute must be submitted to 

arbitration rather than pursued in court; and second, no matter where the claim is brought, the plaintiff may not take advantage of any collective procedures available in the tribunal.

Insofar as the second aspect of its provision is concerned, 

Epic’s clause runs straight into the teeth of Section 7. The provision prohibits any collective, representative, or class legal 

proceeding. Section 7 provides that “[e]mployees shall have 

the right to ... engage in ... concerted activities for the purpose 

of collective bargaining or other mutual aid or protection.” 29 

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U.S.C. § 157. A collective, representative, or class legal proceeding is just such a “concerted activit[y].” See Eastex, 437 

U.S. at 566; Brady, 644 F.3d at 673; D. R. Horton, 357 N.L.R.B. 

No. 184, at *2–3. Under Section 8, any employer action that

“interfere[s] with, restrain[s], or coerce[s] employees in the 

exercise of the rights guaranteed in [Section 7]” constitutes an 

“unfair labor practice.” 29 U.S.C. § 158(a)(1). Contracts that 

stipulate away employees’ Section 7 rights or otherwise require actions unlawful under the NRLA are unenforceable. 

See Nat’l Licorice Co., 309 U.S. at 361; D. R. Horton, 357 N.L.R.B. 

No. 184, at *5.

We are aware that the circuits have some differences of 

opinion in this area, although those differences do not affect 

our analysis here. The Ninth Circuit has held that an arbitration agreement mandating individual arbitration may be enforceable where the employee had the right to opt out of the 

agreement without penalty, reasoning that the employer 

therefore did not “interfere with, restrain, or coerce” her in 

violation of Section 8. Johnmohammadi v. Bloomingdale's, Inc., 

755 F.3d 1072, 1077 (9th Cir. 2014). The Ninth Circuit’s decision in Johnmohammadi conflicts with a much earlier decision 

from this court, which held that contracts between employers 

and individual employees that stipulate away Section 7 rights

necessarily interfere with employees’ exercise of those rights 

in violation of Section 8. See NLRB v. Stone, 125 F.2d 752, 756 

(7th Cir. 1942). Stone, which has never been undermined, held 

that where the “employee was obligated to bargain individually,” an arbitration agreement limiting Section 7 rights was a

per se violation of the NLRA and could not “be legalized by 

showing the contract was entered into without coercion.” Id.

(“This is the very antithesis of collective bargaining.” (citing 

NLRB v. Superior Tanning Co., 117 F.2d 881, 890 (7th Cir. 

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1940))). The Board has long held the same. See D.R. Horton, 

357 N.L.R.B. No. 184, at *5–7 (citing J. H. Stone & Sons, 33 

N.L.R.B. 1014 (1941) and Superior Tanning Co., 14 N.L.R.B. 942 

(1939)). (In Johnmohammadi, the Ninth Circuit, without explanation, did not defer to the Board.) We have no need to resolve these differences today, however, because in our case, it 

is undisputed that assent to Epic’s arbitration provision was 

a condition of continued employment. A contract that limits 

Section 7 rights that is agreed to as a condition of continued 

employment qualifies as “interfer[ing] with” or “restrain[ing]

... employees in the exercise” of those rights in violation of 

Section 8(a)(1). 29 U.S.C. § 157(a)(1).

In short, Sections 7 and 8 of the NLRA render Epic’s arbitration provision unenforceable. Even if this were not the 

case, the Board has found that substantively identical arbitration agreements, agreed to under similar conditions, violate 

Sections 7 and 8. See D. R. Horton, 357 N.L.R.B. No. 184; Murphy Oil USA, Inc., 361 N.L.R.B. No. 72 (2014), enf’d in part and 

granted in part, Murphy Oil USA, Inc. v. NLRB, 808 F.3d 1013 

(5th Cir. 2015). We conclude that, insofar as it prohibits collective action, Epic’s arbitration provision violates Sections 7 and 

8 of the NLRA.

III

That would be all that needs to be said, were it not for the 

Federal Arbitration Act. Epic argues that the FAA overrides 

the labor law doctrines we have been discussing and entitles 

it to enforce its arbitration clause in full. Looking at the arbitration agreement, it is not clear to us that the FAA has anything to do with this case. The contract imposes two rules: (1) 

no collective action, and (2) proceed in arbitration. But it does 

not stop there. It also states that if the collective-action waiver 

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is unenforceable, then any collective claim must proceed in 

court, not arbitration. Since we have concluded in Part II of 

this opinion that the collective-action waiver is incompatible 

with the NLRA, we could probably stop here: the contract itself demands that Lewis’s claim be brought in a court. Epic, 

however, contends that we should ignore the contract’s saving clause because the FAA trumps the NLRA. In essence, 

Epic says that even if the NLRA killed off the collective-action 

waiver, the FAA resuscitates it, and along with it, the rest of 

the arbitration apparatus. We reject this reading of the two 

laws.

In relevant part, the FAA provides that any written contract “evidencing a transaction involving commerce to settle 

by arbitration a controversy thereafter arising out of such contract or transaction ... shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for 

the revocation of any contract.” 9 U.S.C. § 2. Enacted in “response to judicial hostility to arbitration,” CompuCredit Corp. 

v. Greenwood, 132 S. Ct. 665, 668 (2012), its purpose was “to 

make arbitration agreements as enforceable as other contracts, but not more so.” Prima Paint Corp. v. Flood & Conklin 

Mfg. Co., 388 U.S. 395, 404 n.12 (1967). Federal statutory claims 

are just as arbitrable as anything else, unless the FAA’s mandate has been ‘overridden by a contrary congressional command.’” CompuCredit, 132 S. Ct. at 669 (quoting Shearson/American Express Inc. v. McMahon, 482 U.S. 220, 226

(1987)). The FAA’s “saving clause permits agreements to arbitrate to be invalidated by ‘generally applicable contract defenses,’ ... but not by defenses that apply only to arbitration or 

that derive their meaning from the fact that an agreement to 

arbitrate is at issue.” AT&T Mobility LLC v. Concepcion, 563 

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U.S. 333, 339 (2011) (quoting Doctor’s Associates, Inc. v. Casarotto, 517 U.S. 681, 687 (1996)).

Epic argues that the NLRA contains no “contrary congressional command” against arbitration, and that the FAA therefore trumps the NLRA. But this argument puts the cart before 

the horse. Before we rush to decide whether one statute eclipses another, we must stop to see if the two statutes conflict at 

all. See Vimar Seguros y Reaseguros, S.A. v. M/V Sky Reefer, 515 

U.S. 528, 533 (1995). In order for there to be a conflict between 

the NLRA as we have interpreted it and the FAA, the FAA 

would have to mandate the enforcement of Epic’s arbitration 

clause. As we now explain, it does not.

A

Epic must overcome a heavy presumption to show that the 

FAA clashes with the NLRA. “[W]hen two statutes are capable of co-existence ... it is the duty of the courts, absent a 

clearly expressed congressional intention to the contrary, to 

regard each as effective.” Vimar Seguros, 515 U.S. at 533 (applying canon to find FAA compatible with other statute) 

(quoting Morton v. Mancari, 417 U.S. 535, 551 (1974)). Moreover, “[w]hen two statutes complement each other”—that is, 

“each has its own scope and purpose” and imposes “different 

requirements and protections”—finding that one precludes 

the other would flout the congressional design. POM Wonderful LLC v. Coca-Cola Co., 134 S. Ct. 2228, 2238 (2014) (internal 

citations omitted). Courts will harmonize overlapping statutes “so long as each reaches some distinct cases.” J.E.M. Ag 

Supply, Inc. v. Pioneer Hi-Bred Int’l, Inc., 534 U.S. 124, 144 

(2001). Implied repeal should be found only when there is an 

“‘irreconcilable conflict’ between the two federal statutes at issue.” Matsushita Elec. Indus. Co. v. Epstein, 516 U.S. 367, 381 

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(1996) (quoting Kremer v. Chem. Const. Corp., 456 U.S. 461, 468 

(1982)).

Epic has not carried that burden, because there is no conflict between the NLRA and the FAA, let alone an irreconcilable one. As a general matter, there is “no doubt that illegal 

promises will not be enforced in cases controlled by the federal law.” Kaiser Steel Corp. v. Mullins, 455 U.S. 72, 77 (1982). 

The FAA incorporates that principle through its saving clause: 

it confirms that agreements to arbitrate “shall be valid, irrevocable, and enforceable, save upon such grounds as exist at 

law or in equity for the revocation of any contract.” 9 U.S.C. 

§ 2. Illegality is one of those grounds. See Buckeye Check Cashing, Inc. v. Cardegna, 546 U.S. 440, 444 (2006) (noting that illegality is a ground preventing enforcement under § 2). The 

NLRA prohibits the enforcement of contract provisions like 

Epic’s, which strip away employees’ rights to engage in “concerted activities.” Because the provision at issue is unlawful 

under Section 7 of the NLRA, it is illegal, and meets the criteria of the FAA’s saving clause for nonenforcement. Here, the 

NLRA and FAA work hand in glove. 

B

In D.R. Horton, Inc. v. NLRB, the Fifth Circuit came to the 

opposite conclusion.† 737 F.3d at 357. Drawing from dicta that 

first appeared in Concepcion, 563 U.S. at 348, and was then repeated in American Express Co. v. Italian Colors Restaurant, 133 

S. Ct. 2304, 2310 (2013), the Fifth Circuit reasoned that because 

class arbitration sacrifices arbitration’s “principal advantage” 

 † Because this opinion would create a conflict in the circuits, we have 

circulated it to all judges in active service under Circuit Rule 40(e). No 

judge wished to hear the case en banc.

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of informality, “makes the process slower, more costly, and 

more likely to generate procedural morass than final judgment,” “greatly increases risks to defendants,” and “is poorly 

suited to the higher stakes of class litigation,” the “effect of 

requiring class arbitration procedures is to disfavor arbitration.” D.R. Horton, 737 F.3d at 359 (quoting Concepcion, 563 

U.S. at 348–52); see also Italian Colors, 133 S. Ct. at 2312. The 

Fifth Circuit suggested that because the FAA “embod[ies] a 

national policy favoring arbitration and a liberal federal policy favoring arbitration agreements,” Concepcion, 563 U.S. at 

346 (internal quotation marks and citations omitted), any law 

that even incidentally burdens arbitration—here, Section 7 of 

the NLRA—necessarily conflicts with the FAA. See D.R. Horton, 737 F.3d at 360 (“Requiring a class mechanism is an actual

impediment to arbitration and violates the FAA. The saving 

clause is not a basis for invalidating the waiver of class procedures in the arbitration agreement.”).

There are several problems with this logic. First, it makes 

no effort to harmonize the FAA and NLRA. When addressing 

the interactions of federal statutes, courts are not supposed to 

go out looking for trouble: they may not “pick and choose 

among congressional enactments.” Morton, 417 U.S. at 551.

Rather, they must employ a strong presumption that the statutes may both be given effect. See id. The savings clause of the 

FAA ensures that, at least on these facts, there is no irreconcilable conflict between the NLRA and the FAA. 

Indeed, finding the NLRA in conflict with the FAA would 

be ironic considering that the NLRA is in fact pro-arbitration: 

it expressly allows unions and employers to arbitrate disputes 

between each other, see 29 U.S.C. § 171(b), and to negotiate 

collective bargaining agreements that require employees to 

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arbitrate individual employment disputes. See 14 Penn Plaza 

LLC v. Pyett, 556 U.S. 247, 257-58 (2009); City Disposal Systems, 

465 U.S. at 836–37. The NLRA does not disfavor arbitration; in 

fact, it is entirely possible that the NLRA would not bar Epic’s 

provision if it were included in a collective bargaining agreement. See City Disposal Systems, 465 U.S. at 837. (“[I]f an employer does not wish to tolerate certain methods by which employees invoke their collectively bargained rights, [it] is free 

to negotiate a provision in [its] collective-bargaining agreement that limits the availability of such methods.”). If Epic’s 

provision had permitted collective arbitration, it would not 

have run afoul of Section 7 either. But it did not, and so it ran 

up against the substantive right to act collectively that the 

NLRA gives to employees.

Neither Concepcion nor Italian Colors goes so far as to say 

that anything that conceivably makes arbitration less attractive 

automatically conflicts with the FAA, nor does either case 

hold that an arbitration clause automatically precludes collective action even if it is silent on that point. In Concepcion, the 

Supreme Court found incompatible with the FAA a state law 

that declared arbitration clauses to be unconscionable for lowvalue consumer claims. See Concepcion, 563 U.S. at 340. The

law was directed toward arbitration, and it was hostile to the 

process. Here, we have nothing of the sort. Instead, we are 

reconciling two federal statutes, which must be treated on 

equal footing. The protection for collective action found in the 

NLRA, moreover, extends far beyond collective litigation or 

arbitration; it is a general principle that affects countless aspects of the employer/employee relationship. 

This case is actually the inverse of Italian Colors. There the 

plaintiffs argued that requiring them to litigate individually 

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“contravene[d] the policies of the antitrust laws.” 133 S. Ct. at 

2309. The Court rejected this argument, noting that “the antitrust laws do not guarantee an affordable procedural path to 

the vindication of every claim.” With regard to the enforcement of the antitrust laws, the Court commented that “no legislation pursues its purposes at all costs.” Id. (quoting Rodriguez v. United States, 480 U.S. 522, 525–526 (1987) (per curiam)). In this case, the shoe is on the other foot. The FAA does 

not “pursue its purposes at all costs”—that is why it contains 

a saving clause. Id. If these statutes are to be harmonized—

and according to all the traditional rules of statutory construction, they must be—it is through the FAA’s saving clause, 

which provides for the very situation at hand. Because the 

NLRA renders Epic’s arbitration provision illegal, the FAA 

does not mandate its enforcement.

We add that even if the dicta from Concepcion and Italian 

Colors lent itself to the Fifth Circuit’s interpretation, it would 

not apply here: Sections 7 and 8 do not mandate class arbitration. Indeed, they say nothing about class arbitration, or even 

arbitration generally. Instead, they broadly restrain employers

from interfering with employees’ engaging in concerted activities. See 29 U.S.C. §§ 157, 158. Sections 7 and 8 stay Epic’s

hand. (This is why, in addition to its being waived, Epic’s argument that Lewis relinquished his Section 7 rights fails.) 

Epic acted unlawfully in attempting to contract with Lewis to 

waive his Section 7 rights, regardless of whether Lewis agreed 

to that contract. The very formation of the contract was illegal.

See Italian Colors, 133 S. Ct. at 2312 (Thomas, J., concurring) 

(noting, in adopting the narrowest characterization of the 

FAA’s saving clause of any Justice, that defenses to contract 

formation block an order compelling arbitration under FAA). 

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18 No. 15-2997

Finally, finding the NLRA in conflict with the FAA would 

render the FAA’s saving clause a nullity. See TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001) (noting the “cardinal principle of 

statutory construction that a statute ought, upon the whole, 

to be so construed that, if it can be prevented, no clause, sentence, or word shall be superfluous, void, or insignificant”). 

Illegality is a standard contract defense contemplated by the 

FAA’s saving clause. See Buckeye Check Cashing, 546 U.S. at 

444. If the NLRA does not render an arbitration provision sufficiently illegal to trigger the saving clause, the saving clause

does not mean what it says. 

Epic warns us against creating a circuit split, noting that at 

least two circuits agree with the Fifth. See Owen v. Bristol Care, 

Inc., 702 F.3d 1050, 1052 (8th Cir. 2013) (rejecting argument 

that there is inherent conflict between NLRA/Norris LaGuardia Act and FAA); Sutherland v. Ernst & Young LLP, 726 F.3d 

290, 297 n.8 (2d Cir. 2013) (rejecting NLRA-based argument 

without analysis); Richards v. Ernst & Young, LLP, 744 F.3d 

1072, 1075 n.3 (9th Cir. 2013) (noting “[w]ithout deciding the 

issue” that a number of courts have “determined that they 

should not defer to the NLRB's decision in D.R. Horton”). Of 

these courts, however, none has engaged substantively with 

the relevant arguments. 

The FAA contains a general policy “favoring arbitration 

and a liberal federal policy favoring arbitration agreements.” 

Concepcion, 563 U.S. at 346 (internal quotation marks and citations omitted). Its “substantive command” is “that arbitration 

agreements be treated like all other contracts.” See Buckeye 

Check Cashing, 546 U.S. at 447. Its purpose is “to make arbitration agreements as enforceable as other contracts, but not

more so.” Prima Paint, 388 U.S. at 404 n.12 (holding that FAA’s 

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No. 15-2997 19

saving clause prevents enforcement of both void and voidable 

arbitration contracts). “To immunize an arbitration agreement from judicial challenge on” a traditional ground such as

illegality “would be to elevate it over other forms of contract—a situation inconsistent with the ‘saving clause.’” Id.

(applying same principle to fraud in the inducement). The

FAA therefore renders Epic’s arbitration provision unenforceable.

C

Last, Epic contends that even if the NLRA does protect a 

right to class or collective action, any such right is procedural 

only, not substantive, and thus the FAA demands enforcement. The right to collective action in section 7 of the NLRA is 

not, however, merely a procedural one. It instead lies at the 

heart of the restructuring of employer/employee relationships 

that Congress meant to achieve in the statute. See Allen-Bradley Local No. 1111, United Elec., Radio & Mach. Workers of Am. v. 

Wis. Employ’t Relations Bd., 315 U.S. 740, 750 (1942) (“[Section 

7] guarantees labor its ‘fundamental right’ to self-organization 

and collective bargaining.” (quoting Jones & Laughlin Steel, 301 

U.S. 1, 33)); D. R. Horton, 357 N.L.R.B. No. 184, at *12 (noting 

that the Section 7 right to concerted action “is the core substantive right protected by the NLRA and is the foundation 

on which the Act and Federal labor policy rest”). That Section 

7’s rights are “substantive” is plain from the structure of the 

NLRA: Section 7 is the NLRA’s only substantive provision. 

Every other provision of the statute serves to enforce the 

rights Section 7 protects. Compare 29 U.S.C. § 157 with id. 

§§ 151–169. One of those rights is “to engage in ... concerted 

activities for the purpose of collective bargaining or other mutual aid or protection,” id. § 157; “concerted activities” include 

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20 No. 15-2997

collective, representative, and class legal proceedings. See 

Eastex, 437 U.S. at 566; Brady, 644 F.3d at 673; D. R. Horton, 357 

N.L.R.B. No. 184, at *2–3.

The Supreme Court has held that “[b]y agreeing to arbitrate a statutory claim, a party does not forgo the substantive 

rights afforded by the statute; it only submits to their resolution in an arbitral, rather than a judicial, forum.” Mitsubishi 

Motors Corp. v. Soler Chrysler-Plymouth, Inc., 473 U.S. 614, 628

(1985). (Contrary to the Fifth Circuit’s assertion in D.R. Horton, 

the Supreme Court has never held that arbitration does not 

“deny a party any statutory right.” 737 F.3d at 357.)

Arbitration agreements that act as a “prospective waiver 

of a party’s right to pursue statutory remedies”—that is, of a 

substantive right—are not enforceable. Italian Colors, 133 S. Ct. 

at 2310 (quoting Mitsubishi Motors, 473 U.S. at 637 n.19). 

Courts routinely invalidate arbitration provisions that interfere with substantive statutory rights. See, e.g., McCaskill v. 

SCI Mgmt. Corp., 285 F.3d 623, 626 (7th Cir. 2002) (holding unenforceable arbitration agreement that did not provide for 

award of attorney fees in accordance with right guaranteed 

by Title VII); Kristian v. Comcast Corp., 446 F.3d 25, 48 (1st Cir. 

2006) (holding unenforceable arbitration provision precluding treble damages available under federal antitrust law); 

Booker v. Robert Half Int'l, Inc., 413 F.3d 77, 83 (D.C. Cir. 2005) 

(holding unenforceable and severing clause in arbitration 

agreement proscribing exemplary and punitive damages 

available under Title VII); Hadnot v. Bay, Ltd., 344 F.3d 474, 478 

(5th Cir. 2003) (same); Morrison v. Circuit City Stores, Inc., 317 

F.3d 646, 670 (6th Cir. 2003) (holding unenforceable arbitraCase: 15-2997 Document: 39 Filed: 05/26/2016 Pages: 22
No. 15-2997 21

tion agreement that limited remedies under Title VII); Paladino v. Avnet Computer Techs., Inc., 134 F.3d 1054, 1062 (11th 

Cir. 1998) (same).

Epic pushes back with three arguments, but none changes 

the result. It points out the Federal Rule of Civil Procedure 23 

simply creates a procedural device. We have no quarrel with 

that, but Epic forgets that its clause also prohibits the employees from using any collective device, whether in arbitration, 

outside of any tribunal, or litigation. Rule 23 is not the source 

of the collective right here; Section 7 of the NLRA is. Epic also 

notes that courts have held that other employment statutes 

that provide for Rule 23 class actions do not provide a substantive right to a class action. See, e.g., Gilmer v. Interstate/Johnson Lane Corp., 500 U.S. 20, 26 (1991) (Age Discrimination in Employment Act (ADEA)); D.R. Horton, 737 F.3d at

357 (citing court of appeals cases for FLSA). It bears repeating: 

just as the NLRA is not Rule 23, it is not the ADEA or the 

FLSA. While the FLSA and ADEA allow class or collective actions, they do not guarantee collective process. See 29 U.S.C. 

§§ 216(b), 626. The NLRA does. See id. § 157. Epic’s third argument is that because Section 7 deals with how workers pursue their grievances—through concerted action—it must be 

procedural. But just because the Section 7 right is associational does not mean that it is not substantive. It would be odd 

indeed to consider associational rights, such as the one guaranteed by the First Amendment to the U.S. Constitution, nonsubstantive. Moreover, if Congress had meant for Section 7 to 

cover only “concerted activities” related to collective bargaining, there would have been no need for it to protect employees’ “right to ... engage in other concerted activities for the 

purpose of collective bargaining or other mutual aid or protection.” 29 U.S.C. § 157 (emphasis added). 

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22 No. 15-2997

IV

Because it precludes employees from seeking any class, 

collective, or representative remedies to wage-and-hour disputes, Epic’s arbitration provision violates Sections 7 and 8 of 

the NLRA. Nothing in the FAA saves the ban on collective action. The judgment of the district court is therefore AFFIRMED.

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