UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD

REGION 12 KENT SECURITY OF NAPLES, INC. d/b/a KENT SECURITY and KENT SECURITY SERVICES, INC.

and Case 12-CA-169912 RONALD FERRELL, an Individual

COUNSEL FOR THE GENERAL COUNSEL’S OPPOSITION TO RESPONDENTS’ MOTION FOR SUMMARY JUDGMENT

TO THE HONORABLE BOARD:

The undersigned Counsel for the General Counsel hereby opposes the “Employer’s Motion for

Summary Judgment” (the Motion) in the above case, filed by Counsel for Respondents with the Board

on September 14, 2016, and respectfully states as follows:

I. BACKGROUND

On June 30, 2016, the Regional Director for Region 12 issued a Complaint and Notice of

Hearing (the Complaint) in the above-captioned case alleging that Kent of Naples, Inc. d/b/a Kent

Security (Respondent Kent of Naples) and Kent Security Services, Inc. (Respondent Kent Security),

herein collectively called Respondents, have violated Section 8(a)(1) of the Act. The hearing in this

matter is scheduled to begin on October 14, 2016. The Complaint is attached as Exhibit A.

The Complaint alleges, inter alia, that Respondents have promulgated and maintained a

requirement that employees enter into an "Agreement Regarding Arbitration of all Employment

Disputes and Waiver of Right to Jury Trial" (the Agreement) as a condition of employment, in

violation of Section 8(a)(1) of the Act. The Complaint specifically alleges that Respondents have

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violated the Act because the Agreement prohibits employees from filing employment related class,

collective or representative actions in court or in arbitration, requires employees to resolve employment

related disputes by individual arbitration, and could reasonably be construe to bar or restrict employees

from exercising their right to file charges with the Board and/or to access the Board's processes. On

July 7, 2016, Respondents filed an answer admitting, in part, and denying in part, the allegations of the

Complaint, denying that they have violated the Act in any way. Respondents’ Answer is attached

hereto as Exhibit B.

Thereafter, on September 14, 2016, Respondents filed the Motion, contending that summary

judgment is appropriate and that the Board should dismiss the Complaint in its entirety. Respondents

specifically argue that courts have universally held that employment arbitration agreements with class

action waivers are fully enforceable, that there is a strong federal policy under the Federal Arbitration

Act (FAA) to promote the rigorous enforcement of arbitration agreements according to their terms,

while there is nothing in the NLRA that overrides the FAA. Respondents further argued that no

reasonable employee could interpret the Agreement as barring the filing of charges with the Board.

Respondents’ contentions are without merit.

II. DISMISSAL OF THE COMPLAINT IS NOT APPROPRIATE.

Pursuant to Section 102.24(b) of the Rules and Regulations, the Board, in its discretion, may

deny a motion for summary judgment where it believes that a genuine issue of fact may exist. A motion

for summary judgment may properly be granted only where there is no genuine issue of material fact to

be tried, and the facts as to which there is no such issue warrant judgment for the moving party as a

matter of law. See Fed.R.Civ.P. 56(c); see, e.g., Madonna v. American Airlines, Inc., 82 F.3d 59, 61 (2d

Cir.l996). The function of the court in considering the motion for summary judgment is not to resolve

disputed questions of fact but only to determine whether, as to any material issue, a genuine factual

dispute exists. See, e.g., Liberty Lobby, 477 U.S 242, 249-50, 106 S. Ct. 2505 (1986). Where the 2

moving party has failed to establish that there is "no genuine issue as to any material fact," the burden

does not shift to the opposing party to show that there is a genuine issue for hearing. See Lake Charles

Mem. Hosp., 240 N.L.R.B. 1330 (1979). The Board has held that a simple denial of unlawful conduct

is sufficient to raise a material question [appropriate for hearing]. Id. See also Florida Steel

Corporation, 222 NLRB 586 (1976).

Respondent’s Motion should be denied because there are substantial issues of material fact that

are in dispute, and require the introduction of evidence. In their Answer, although Respondents admit

that each of them are employers engaged in commerce within the meaning of Section 2(2), (6) and (7)

of the Act, they have denied that Respondent Kent of Naples is a subsidiary of Respondent Kent

Security. By its terms, Respondents’ “Agreement,” a full copy of which was attached to Respondent’s

Motion, applies to all employees of Respondent Kent Security and its “affiliated entities and

subsidiaries.” General Counsel intends to introduce evidence, either at a hearing or by stipulation, that

Respondent Kent of Naples and various other entities are affiliated entities and/or subsidiaries of

Respondent Kent Security, to which the Agreement applies. In addition, this evidence will have an

impact of the scope of the remedy ordered by the Board in the event a violation of the Act is found.

Respondents also denied knowledge or information as to whether either of them provided

services valued in excess of $50,000 to other commercial enterprises located in the State of Florida,

each of which other enterprises purchased and received goods valued in excess of $50,000 directly

from points located outside the State of Florida: facts establishing interstate commerce. Thus,

Respondents have effectively denied the underpinning for the commerce conclusions. General Counsel

intends to introduce evidence to prove the above-described denied allegations, contained in paragraphs

2(a), 2(b) and 3(b) of the Complaint, through the introduction of evidence at the hearing.

Notwithstanding the above, if the Board concludes that there are no material facts in dispute,

then Counsel for the General Counsel submits that the undisputed facts herein establish that 3

Respondents have violated Section 8(a)(1) of the Act by promulgating and maintaining the Agreement

as a condition of employment.

III. ARGUMENT

Since at least January 27, 2016, Respondents have provided their employees with copies of

“Agreement Regarding Arbitration of All Employment Disputes and Waiver of Right to Jury Trial”

(the Agreement) by mail. The Agreement provides for mandatory arbitration and requires employees

to execute the same, or to submit any proposal to modify the terms and conditions within fifteen (15)

business days of receipt.

The Agreement also contains the following provisions concerning employee’s right to collective

legal action:

A. All Employment-Related Claims Are Subject To Arbitration. "Kent Security" includes Kent Security Services, Inc., and any of its affiliated entities or subsidiaries. Employee and Kent Security agree to submit any claims based on, arising out of or relating in any way to their employment relationship or the termination of the employment relationship to binding arbitration. Without limiting the generality of the foregoing, Employee and Kent Security agree to submit to binding arbitration any claims arising under Title VII of the Civil Rights Act of 1964, the Equal Pay Act, , the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Florida Civil Rights Act, the Florida Whistleblower's Act, the Fair Labor Standards Act, Sections 1981 through 1988 of Title 42 of the United States Code, any other federal, state or local law, regulation or ordinance, and any common law claims, claims for breach of contract, or claims for declaratory relief. The arbitrator shall decide whether any particular dispute or claim is arbitrable.

B. Exclusions. Notwithstanding the foregoing, nothing in this Agreement shall prevent Employee or Kent Security, as the case may be, from applying for, or receiving, temporary injunctive relief from a court of competent jurisdiction in aid of arbitration or for the maintenance of the status quo pending arbitration. Nothing in this Agreement shall prevent or restrict any employee’s right to file a charge with any government agency or right to participate in any investigation by any government agency.

…

F. Waiver of Class or Collective Action. Employee agrees that there shall be no right or authority to bring any claim described or referred to in Paragraph A of this Agreement in arbitration or in court as a class action, collective action, or on a representative basis,

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and that Employee is not entitled to serve or participate as a class, collective or representative action member or representative or to receive any recovery from a class, collective or representative action involving claims covered by this Agreement, either in court or in arbitration.

A. The Agreement interferes with employees’ access to the Board and its processes

The Board has made clear that mandatory arbitration policies which interfere with employees’ right

to file an unfair labor practice charge are unlawful.1 This right is interfered with, inter alia, when a

reasonable employee would construe the arbitration agreement language to prohibit filing unfair labor

practice charges with the Board.2 The Board considers this by examining the agreement in its

entirety.3 In the instant case, the language of the Agreement is overly broad, conflicting, and unclear,

such that employees would reasonably construe it to preclude the filing of unfair labor practice charges.

In this regard, Section A of the Agreement states that arbitration is the exclusive and mandatory

method for resolving rights covered by federal laws. Section F explicitly states that there is “no right

or authority to bring any claim describe or referred to in Paragraph A” in court as a class action,

collective action or representative basis.” It is submitted that the Agreement, taken as a whole, would

lead reasonable employees to believe that they must exclusively pursue arbitration in order to resolve

unfair labor practices, and that they are precluded from seeking access to the Board and its processes

because of the Agreement.4 Although Section B of the Agreement provides that it does not limit the

employees’ right to file a charge with any government agency, this provision conflicts with other

provisions of the Agreement describing what is covered and which, as noted above, explicitly include

federal statutes. The Board has found that inconsistencies such as the one present in this Agreement

1 See, e.g., Supply Technologies, LLC, 359 NLRB No. 38, slip op. at 1-4 (2012); Bill’s Electric, Inc., 350 NLRB 292, 296 (2007); U-Haul Co. of California, 347 NLRB at 377-78 (2006). 2 See, e.g., U-Haul Co. of California, 347 NLRB at 377 (citing Lutheran Heritage Village-Livonia, 343 NLRB 646 (2004)). 3 U-Haul of California, 347 NLRB at 377-78 (determining that reasonable employees would construe the agreement to prohibit filing NLRB charges where “claim” included “causes of action recognized by … federal law or regulations”). 4 Id.

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would easily confuse employees as to the possession on their statutory right to file a charge or to access

the Board’s processes.5

B. The Agreement violates Section 8(a)(1) because it interferes with employees’ Section 7 right to participate in collective and class action litigation

In D.R. Horton, Inc., the Board set forth the appropriate legal framework for considering the

legality of employers’ policies and agreements that limit collective and class legal activity in non-union

settings.6 The Board applied the Lutheran Heritage test,7 and found that an agreement requiring

employees to waive their right to collectively pursue employment-related claims in all forums violates

Section 8(a)(1) “because it expressly restricts Section 7 activity or, alternatively, because employees

would reasonably read it as restricting such activity.”8 In sum, the Board held in D.R. Horton that an

employer violates Section 8(a)(1) by requiring employees “as a condition of their employment, to sign

an agreement that precludes them from filing joint, class, or collective claims addressing their wages,

hours or other working conditions against the employee in any forum, arbitral or judicial.”9 The Board

reaffirmed its D.R. Horton decision in Murphy Oil USA, explaining that “because mandatory arbitration

agreements like those involved in D.R. Horton purport to extinguish a substantive right to engage in

concerted activity under the NLRA, they are invalid.”10

The Agreement in this case similarly precludes employees from filing employment-related

collective or class claims against Respondents. Specifically, the Agreement requires employees to bring

“any claims, based on, arising out of or relating in any way to their employment relationship or the

termination of the employment relationship to binding arbitration.” This includes any claims arising

under “any other federal, statute or local law, regulation or ordinance.” The Agreement further

5 Ralph’s Grocery Co., 363 NLRB No. 128, slip op at 1-2 (February 23, 2016). 6 357 NLRB 2277, 2277-2283 (2012). 7 Lutheran Heritage Village-Livonia, 343 NLRB 646, 646-47 (2004). 8 357 NLRB at 2283. 9 Id., at 2277. 10 Murphy Oil USA, Inc., 361 NLRB No. 72, slip op. at 8 (Oct. 28, 2014).

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provides that the employee waives its right or authority “to bring any claim described or referred… in

arbitration or in court as a class action, collective action, or on a representative basis…” Thus,

Respondents’ maintenance of the Agreement violates Section 8(a)(1) because it precludes employees’

collective legal activity. While the Agreement provides that it does not “prevent or restrict any

employee’s right to file a charge with any government agency or right to participate in any

investigation by any government agency,” it still limits that right to act only in an individual capacity

and an employee would reasonably construe the language of the Agreement in that manner.

The Board has found that even when such agreements contain an opt-out provision, they still

restrict employees in the exercise of their Section 7 rights by asking them to prospectively waive those

rights. In On Assignment Staffing Services, 362 NLRB No. 189, slip op. at 4-5, enf. denied No. 15-

60642, 2016 WL 3685206 (5th Cir. June 6, 2016), the Board concluded that an agreement waiving the

right to bring collective or class actions “does not cease to be a condition of employment simply

because employees are given an opportunity to opt out of it.” 362 NLRB No. 189, at slip op. 1, 3, 4; see

also PAMA Management, 363 NLRB No. 38, slip op. at 1, 2, 11 (2015). As the Board found in On

Assignment Staffing Services, such a procedure “creates a second mandatory condition of

employment,” requiring that the employee comply with procedures imposed by the employer, which

interfere with the right under Section 7 to purse collective or class litigation “by significantly burdening

its exercise.” 362 NLRB No. 189, slip op. at 1, 4-5. The Agreement in this case provides that

employees “must execute the Agreement” or submit “any proposal to modify the terms and conditions

of the Agreement within fifteen (15) business days.” This provision unlawfully interferes with

employees’ Section 7 rights by placing the burden on employees to affirmatively preserve their right to

engage in collective litigation. Just like an employer may not require employees to affirmatively

preserve their Section 7 rights to discuss terms and conditions of employment amongst themselves, to

strike, or to engage in other union or concerted activities, an employer may not require employees to 7

affirmatively preserve their right to engage in collective and class legal actions, or in this case, to

bargain to retain such right. Thus, by placing the burden on employees to take immediate steps in order

to retain their Section 7 rights or lose them forever, the Employer necessarily interferes with its

employees’ exercise of those statutory rights. In this regard, an employee may not necessarily

understand the implications of this provision, or may not feel compel to bargain individually with its

employer.

Moreover, the limited “opt-out” procedure’s necessary requirement that employees self-identify

to their employer as choosing to preserve their right to engage in Section 7 activity and engage in

bargaining to preserve such right itself is antithetical to the representative aspect of collective action,

and the protection it affords employees from fear of reprisal.11 By the same token, if employees fail to

exercise the limited “opt-out” provision provided in the Agreement within 15 days and propose to

bargain with the Respondent, the Agreement unlawfully interferes with their Section 7 right to engage

in collective legal activity by establishing an irrevocable waiver of their future Section 7 rights. Thus,

in analogous circumstances, the Board has found unlawful and unenforceable agreements that

condition employment on the employee’s waiver of prospective Section 7 rights, concluding that

“future rights of employees as well as the rights of the public may not be traded away in this

manner.”12

By forcing employees to sign the Agreement, as a condition of employment, Respondents

attempted to foreclose all concerted employment-related litigation, filing of charges, or arbitration by

11 See, e.g., Special Touch Home Care Services, 357 NLRB 4, 10 (2011) (“The premises of the Act . . . and our experience with labor-management relations . . . suggest that permitting an employer to compel employees to provide individual notice of participation in collective action would impose a significant burden on the right . . .”). 12 Mandel Security Bureau, Inc., 202 NLRB 117, 119 (1973) (finding unlawful an employer’s conditioning reinstatement on the employee’s refraining from future concerted activities and unfair labor charges, in addition to requesting withdrawal of pending charges); see also Ishikawa Gasket America, Inc., 337 NLRB 175, 175-76 (2001)(finding unlawful a separation agreement prohibiting the departing employee from engaging in union and other protected activities for a 1-year period), enforced, 354 F.3d 534 (6th Cir. 2004).

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employees, stripping them of their Section 7 right to engage in this form of concerted activity for their

mutual aid and protection.

C. The Board’s Decisions in D.R. Horton, Murphy Oil, and their progeny are controlling

Although the United States Courts of Appeals for the Fifth and Eighth13 Circuits have denied

the enforcement of Board orders finding that class action waivers unlawfully prevent employees from

exercising the “core substantive right” of the Act – to act together for their mutual aid and protection,

including through the filing of class and collective action suits against their employers – the Seventh

and Ninth Circuit Courts of Appeals have recently agreed with the Board’s reasoning. Lewis v. Epic

Systems, 823 F.3d 1147 (7th Cir. May 26, 2016); Morris v. Ernst & Young, ___ F.3d ___, (9th Cir.

August 22, 2016); cf. D. R. Horton, Inc. v. NLRB, 737 F.3d 344 (5th Cir. 2013); Murphy Oil USA, Inc.

v. NLRB, 808 F.3d 1013 (5th Cir. 2015); Cellular Sales of Missouri, LLC v. NLRB, 824 F.3d 772, (8th

Cir. June 2, 2016).

The Board’s holdings in D.R. Horton and its progeny remain Board law unless and until that

position is reversed by the Supreme Court. See, e.g., Pathmark Stores, 342 NLRB 378, n.1 (2004);

Chesapeake Energy Corp., 362 NLRB No. 80 (2015), enf. denied in relevant part 633 Fed.Appx. 613

(5th Cir. 2016).14 In Pathmark Stores, the Board reiterated that:

[i]t has been the Board's consistent policy for itself to determine whether to acquiesce in the contrary views of a circuit court of appeals or whether, with due deference to the court's opinion, to adhere to its previous holding until the Supreme Court of the United States has ruled otherwise … [I]t remains the [judge's] duty to apply established Board precedent which the Supreme Court has not reversed. Only by such recognition of the legal authority of Board precedent, will a uniform and orderly administration of a national act, such as the National Labor Relations Act, be achieved.

13 Cellular Sales of Missouri v. NLRB, 15-1620, 15-1860, 2016 WL 3093363 (8th Cir. June 2, 2016). 14 In Chesapeake Energy, the Board reversed an ALJ, who sought to reverse the Board’s decision in D.R. Horton and foreclose further findings that class and collective action waivers contained in an employment arbitration agreement could, in and of themselves, violate the Act. The Board expressly rejected the ALJ’s arguments for deference of the NLRA to the Federal Arbitration Act (FAA) and held, once again, that arbitration policies violate Section 8(a)(1) when their class and collective action waivers fail the Lutheran Heritage test. 362 NLRB No. 80, slip op. at 1-3.

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342 NLRB 378, n. 1 (2004) (emphasis added), quoting Iowa Beef Packers, Inc., 144 NLRB 615, 616

(1963), enfd. in part 331 F.2d 176 (8th Cir. 1964), quoting Insurance Agents’ International Union,

AFL-CIO, 119 NLRB 768, 773 (1957); see also, discussion of the Board’s non-acquiescence policy in

Citigroup Technology, Inc., 363 NLRB No. 55, slip op. at 6-7 (2015).

D. Section 7 of the Act creates a substantive right to pursue collective legal action in forums other than arbitration

As the Board has held time and again, the NLRA’s core substantive right is the Section 7 right

of employees to act collectively for their mutual aid or protection. See, e.g., Murphy Oil, 361 NLRB

No. 72, slip op. at 6; Bristol Farms, 364 NLRB No. 34 (2016). It is unquestionably a substantive, not a

procedural, right, as indicated by the statement of purpose in Section 1 of the Act that the NLRA was

enacted to correct “the inequality of bargaining power between employees who do not possess full

freedom of association or actual liberty of contract and [corporate] employers,” and to remove the

impediments which that same inequality presents to the free flow of commerce. “[T]he D.R. Horton

Board was clearly correct when it observed that the ‘right to engage in collective action – including

collective legal action – is the core substantive right protected by the NLRA and is the foundation on

which the Act and Federal labor policy rest.’” Murphy Oil, supra, slip op. at 7, quoting D.R. Horton,

supra, slip op. at 10 (emphasis original to Murphy Oil).

The Board has long held that the specific collective activity of jointly pursuing legal claims

related to the terms and conditions of employment is a form of protected, concerted Section 7 activity,

and the Board has repeatedly found that these agreements, barring employees from collectively

pursuing their legal claims, constitute a patently unlawful waiver of Section 7’s substantive right to act

together for employees’ mutual aid and protection. Id. at 7 (“The [Fifth Circuit’s] first step was to

determine that pursuit of legal claims concertedly is not a substantive right under Section 7 of the

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NLRA. We cannot accept that conclusion; it violates the long-established understanding of the Act and

national labor policy, as reflected, for example, in the Supreme Court’s decision in Eastex …”).

The Board emphasized in D.R. Horton that finding an arbitration agreement unlawful does not

conflict with the FAA because “the intent of the FAA was to leave substantive rights undisturbed.”

357 NLRB No. 184, slip op. at 11. Respondent’s Agreement expressly requires that employees

prospectively sign away their substantive Section 7 right to join together and pursue collective relief

from an Employer’s violations of other laws in any forum, and therefore cannot be enforceable under

the FAA. That portion of the disputed Agreement which mandates that individual arbitration is the

exclusive remedy for such violations must be found unlawful and henceforth rescinded for all

employees and former employees who are signatories to it.

E. The Board Decisions in D.R. Horton and Murphy Oil correctly accommodate the NLRA and FAA The Murphy Oil Board emphatically affirmed that the FAA’s savings clause provides for the

revocation of otherwise mandatory arbitration agreements “upon such grounds as exist at law…” and

that “Section 7… amounts to a ‘contrary congressional command’ overriding the FAA.” 361 NLRB

No. 72, slip op. at 9. As the D.R. Horton Board noted, the Supreme Court has not heretofore addressed

whether an employer can infringe upon employees’ substantive Section 7 right to concertedly pursue

employment-related claims – AT&T Mobility v. Concepcion, 563 U.S. 32 (2011), for example, arose in

the context of a commercial arbitration agreement and the high court focused its opinion on the

preemption of a state consumer protection law, not employees’ substantive, federal collective action

rights under Section 7 of the NLRA. 357 NLRB No. 184, slip op. at 12.

Moreover, in Murphy Oil, the Board explained that when the NLRA was enacted in 1935 and

amended in 1947, the FAA had not ever been applied to individual employment contracts, and noted:

[i]t is hardly self-evident that the FAA – to the extent that it would compel Federal courts to enforce mandatory individual arbitration agreements prohibiting concerted

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legal activity by employees – survived the enactment of the Norris-LaGuardia Act [in 1932] and its sweeping prohibition of “yellow dog” contracts.

361 NLRB No. 72, slip op. at 10. The Board found that, even if there is a conflict between the NLRA

and the FAA, the Norris-LaGuardia Act prevents enforcement of any private agreement inconsistent

with the statutory policy of protecting employees’ concerted activity, including an agreement that seeks

to prohibit a “lawful means [of] aiding any person participating or interested in a” lawsuit arising out of

a labor dispute. Id. The Board found that in the event of a conflict, the FAA would therefore have to

yield to the NLRA insofar as necessary to accommodate employees’ substantive Section 7 rights. Id.

IV. CONCLUSION

Based on the above, it is submitted that the outstanding Complaint in this matter, together with

Respondents’ answer thereof, raises substantial and material issues of fact as to which there is a

genuine dispute, the merits of which should be heard before an administrative law judge. Thus,

Respondents’ Motion should be denied. In the alternative, Counsel for the General Counsel requests

that, if the Board understands that Respondents’ admissions are sufficient to establish jurisdiction, that

it find that Respondents violated Section 8(a)(1) of the Act, as alleged in the Complaint, and orders

Respondents to rescind all Agreements signed by their employees.

Dated at San Juan, this 23rd day of September 2016.

Respectfully submitted,

/s/ Ayesha K. Villegas Estrada

Ayesha K. Villegas Estrada Counsel for the General Counsel National Labor Relations Board, Subregion 24 525 FD Roosevelt Avenue La Torre de Plaza, Suite I 002 San Juan, PR 000918-1002 Telephone (787) 766-5477 Facsimile (787) 766-5478 Email: avillega@nlrb.gov

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CERTIFICATE OF SERVICE

I hereby certify that a copy of COUNSEL FOR THE GENERAL COUNSEL’S

OPPOSITION TO “EMPLOYER’S MOTION FOR SUMMARY JUDGMENT in Case 12-CA-

169912 was electronically filed with the National Labor Relations Board Office of the Executive

Secretary and served by electronic mail upon the below- listed parties on this 23rd day of September

2016.

Daniel Eric Gonzalez BLUEROCK LEGAL, P.A. Counsel for Respondents 10800 Biscayne Boulevard, Suite 410 Miami, FL 33161 Phone: (305) 981-4300 Fax: (305) 981-4304 E-mail: dgonzalez@bluerocklegal.com

Ronald Ferrell 3409 Goldie Lane Naples, FL 34112-6231 Phone: (239) 207-5436 E-mail: krsusidiaries@centurylink.net

/s/ Ayesha K. Villegas Estrada

Ayesha K. Villegas Estrada Counsel for the General Counsel National Labor Relations Board, Subregion 24 525 FD Roosevelt Avenue La Torre de Plaza, Suite I 002 San Juan, PR 000918-1002 Telephone (787) 766-5477 Facsimile (787) 766-5478 Email:avillega@nlrb.gov

EXHIBIT A

UNITED STATES OF AMERICA BEFORE THE NATIONAL LABOR RELATIONS BOARD

REGION 12

KENT SECURITY OF NAPLES, INC. d/b/a KENT SECURITY and KENT SECURITY SERVICES, INC.

Case 12-CA-169912

RONALD FERRELL, an Individual

COMPLAINT AND NOTICE OF HEARING

This Complaint and Notice of Hearing is based on a charge filed by Ronald Ferrell, an

Individual (the Charging Party). It is issued pursuant to Section 10(b) of the National Labor

Relations Act (the Act), 29 • U.S.C. § 151 et seq., and Section 102.15 of the Rules and

Regulations of the National Labor Relations Board (the Board) and alleges that Kent of Naples,

Inc. d/b/a Kent Security (Respondent Kent of Naples) and Kent Security Services, Inc.

(Respondent Kent Security), herein collectively called Respondents, have violated the Act as

described below:

1.

(a) The original charge in this proceeding was filed by the Charging Party on

February 18, 2016, and a copy was served on Respondents by U.S. mail on the same date.

(b) The first amended charge in this proceeding was filed by the Charging Party on

May 20, 2016, and a copy was served on Respondents by U.S. mail on May 23, 2016.

(c) The second amended charge in this proceeding was filed by the Charging Party on

June 30, 2016, and a copy was served on Respondents by U.S. mail on June 30, 2016.

2.

(a) At all material times, Respondent Kent of Naples, a subsidiary of Respondent Kent

Security, has been a Florida corporation with an office and place of business in North Miami

Beach, Florida, los-4ee,n and has been engaged in providing security guard services at various

locations in the State of Florida.

(b) During the past 12 months, in conducting its business operations described above in

paragraph 2(a), Respondent Kent of Naples provided services valued in excess of $50,000 to

other commercial enterprises located in the State of Florida, each of which other enterprises

purchased and received goods valued in excess of $50,000 directly from points located outside

the State of Florida:

(c) At all material times, Respondent Kent of Naples has been an employer engaged in

commerce within the meaning of Section 2(2), (6), and (7) of the Act.

3.

(a) At all material times, Respondent Kent Security has been a Florida corporation with

an office and place of business in North Miami Beach, Florida, and has been engaged in

providing security guard services at various locations in the State of Florida.

(b) During the past 12 months, in conducting its business operations described above in

paragraph 3(a), Respondent Kent Security provided services valued in excess of $50,000 to other

commercial enterprises located in the State of Florida, each of which other enterprises purchased

and received goods valued in excess of $50,000 directly from points located outside the State of

Florida.

(c) At all material times, Respondent Kent Security has been an employer engaged in

commerce within the meaning of Section 2(2), (6), and (7) of the Act.

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4.

At all material times, Guillermo Lanza, Branch Manager, has been a supervisor of

Respondents within the meaning of Section 2(11) of the Act and an agent of Respondents within

the meaning of Section 2(13) of the Act.

5.

(a) Since on or about January 27, 2016, Respondents have promulgated and since then

have maintained a requirement that employees of "Kent Security Services, Inc., and "any of its

affiliated entities or subsidiaries" enter into an "Agreement Regarding Arbitration of all

Employment Disputes and Waiver of Right to Jury Trial" (the Agreement) as a condition of

employment that provides, in relevant part:

A. All Employment-Related Claims Are Subject To Arbitration. "Kent Security" includes Kent Security Services, Inc., and any of its affiliated entities or subsidiaries. Employee and Kent Security agree to submit any claims based on, arising out of or relating in any way to their employment relationship or the termination of the employment relationship to binding arbitration. Without limiting the generality of the foregoing, Employee and Kent Security agree to submit to binding arbitration any claims arising under Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Employee Retirement Income Security Act, the Family and Medical Leave Act, the Florida Civil Rights Act, the Florida Whistleblower's Act, the Fair Labor Standards Act, Sections 1981 through 1988 of Title 42 of the United States Code, any other federal, state or local law, regulation or ordinance, and any common law claims, claims for breach of contract, or claims for declaratory relief. The arbitrator shall decide whether any particular dispute or claim is arbitrable.

F. Waiver of Class or Collective Action. Employee agrees that there shall be no right or authority to bring any claim described or referred to in Paragraph A of this Agreement in arbitration or in court as a class action, collective action, or on a representative basis, and that Employee is not entitled to serve oi`participate as a class, collective or representative action member or representative or to receive any recovery from a class, collective or representative action involving claims covered by this Agreement, either in court or in arbitration.

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(b) By the conduct described above in paragraph 5(a), Respondents have been

prohibiting employees from filing employment related class, collective or representative actions

in court or in arbitration and have been requiring employees to resolve employment related

disputes by individual arbitration.

(c) By the conduct described above in paragraph 5(a), Respondents have been barring or

restricting employees from exercising their right to file charges with the Board and to access the

Board's processes, because employees would reasonably 'construe the language of the Agreement

in that manner.

6.

By the conduct described above in paragraphs 5(a) through 5(c), Respondents have been

interfering with, restraining, and coercing employees in the exercise of the rights guaranteed in

Section 7 of the Act, in violation of Section 8(a)(1) of the Act.

7.

The unfair labor practices of Respondents described above affect commerce within the

meaning of Section 2(6) aid (7) of the Act.

WHEREFORE, as part of the remedy for Respondents' unfair labor practices, the

General Counsel seeks an Order requiring Respondents to rescind all Agreements signed by their

employees and employees of Respondent Kent Security's affiliated entities and subsidiaries, and

to notify all applicants and current and former employees of Respondents and the affiliated

entities and subsidiaries of Respondent Kent Security, including those who signed the

Agreement and with respect to whom the Agreement has been maintained at any time since

January 27, 2016, that the Agreement has been rescinded.

The General Counsel further seeks all other relief as may be just and proper to remedy

the unfair labor practices alleged.

ANSWER REQUIREMENT

Respondent is notified that, pursuant to Sections 102.20 and 102.21 of the Board's Rules

and Regulations, it must file an answer to the complaint. The answer must be received by this

office on or before July 14 2016, or postmarked on or before July 13, 2016. Respondent

should file an original and four copies of the answer with this office and serve a copy of the

answer on each of the other parties.

An answer may also be filed electronically through the Agency's website. To file

electronically, go to www.nlrb.gov, click on E-File Documents, enter the NLRB Case Number,

and follow the detailed instructions. The responsibility for the receipt and usability of the answer

rests exclusively upon the sender. Unless notification on the Agency's website informs users that

the Agency's E-Filing system is officially determined to be in technical failure because it is

unable to receive documents for a continuous period of more than 2 hours after 12:00 noon

(Eastern Time) on the due date for filing, a failure to timely file the answer will not be excused

on the basis that the transmission could not be accomplished because the Agency's website was

off-line or unavailable for some other reason. The Board's Rules and Regulations require that an

answer be signed by counsel or non-attorney representative for represented parties or by the

party if not represented. See Section 102.21. If the answer being filed electronically is a pdf

document containing the required signature, no paper copies of the answer need to be transmitted

to the Regional Office. However, if the electronic version of an answer to a complaint is not a

pdf file containing the required signature, then the E-filing rules require that such answer

containing the required signature continue to be submitted to the Regional Office by traditional

means within three (3) business days after the date of electronic filing. Service of the answer on

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each of the other parties must still be accomplished by means allowed under the Board's Rules

and Regulations. The answer may not be filed by facsimile transmission. If no answer is filed, or

if an answer is filed untimely, the Board may find, pursuant to a Motion for Default Judgment,

that the allegations in the complaint are,true.

NOTICE OF HEARING

PLEASE TAKE NOTICE THAT on October 14, 2016, at 9:30 a.m., at National Labor

Relations Board Hearing Room 51 SW 1st Avenue, Room 1320, Miami, Florida, and on

consecutive days thereafter until concluded, a hearing will be conducted before an administrative

law judge of the National Labor Relations Board. At the hearing, Respondent and any other

party to this proceeding have the right to appear and present testimony regarding the allegations

in this complaint. The procedures to be followed at the hearing are described in the attached

Form NLRB-4668. The procedure to request a posfponement of the hearing is described in the

attached Form NLRB-4338.

Dated: June 30, 2016.

T) OP a/La XCI

Margaret J. .z, Regio Director National La or Relations Board, Region 12 201 E Kennedy Blvd., Suite 530 Tampa, FL 33602-5824

Attachments

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FORM NLRB 4338 (6-90)

UNITED STATES GOVERNMENT NATIONAL LABOR RELATIONS BOARD

NOTICE

Case 12-CA-169912

The issuance of the notice of formal hearing in this case does not mean that the matter cannot be disposed of by agreement of the parties. On the contrary, it is the policy of this office to encourage voluntary adjustments. The examiner or attorney assigned to the case will be pleased to receive and to act promptly upon your suggestions or comments to this end.

An agreement between the parties, approved by the Regional Director, would serve to cancel the hearing. However, unless otherwise specifically ordered, the hearing will be held at the date, hour, and place indicated. Postponements will not be granted unless good and sufficient grounds are shown and the following requirements are met:

(1) The request must be in writing. An original and two copies must be filed with the Regional Director when appropriate under 29 CFR 102.16(a) or with the Division of Judges when appropriate under 29 CFR 102.16(b).

(2) Grounds must be set forth in detail;

(3) Alternative dates for any rescheduled hearing must be given;

(4) The positions of all other parties must be ascertained in advance by the requesting party and set forth in the request; and

(5) Copies must be simultaneously served on all other parties (listed below), and that fact must be noted on the request.

Except under the most extreme conditions, no request for postponement will be granted during the three days immediately preceding the date of hearing.

Shelly Tygielski, President Kent of Naples, Inc. d/b/a Kent Security 14600 Biscayne Blvd. North Miami, FL 33181-1212

Ronald Ferrell 3409 Goldie Lane Naples, FL 34112-6231

Frank H. Henry, Esq. Bluerock Legal, P.A. 10800 Biscayne Blvd., Ste. 410 Miami, FL 33161

Form NLRB-4668 (6-2014)

Procedures in NLRB Unfair Labor Practice Hearings

The attached complaint has scheduled a hearing that will be conducted by an administrative law judge (AU) of the National Labor Relations Board who will be an independent, impartial finder of facts and applicable law. You may be represented at this hearing by an attorney or other representative. If you are not currently represented by an attorney, and wish to have one represent you at the hearing, you should make such arrangements as soon as possible. A more complete description of the hearing process and the AL's role may be found at Sections 102.34, 102.35, and 102.45 of the Board's Rules and Regulations. The Board's Rules and regulations are available at the following link: www.nlrb.govisites/default/files/attachments/basic-page/node-1717/rules and mu part 102.pdf.

The NLRB allows you to file certain documents electronically and you are encouraged to do so because it ensures that your government resources are used efficiently. To e-file go to the NLRB's website at www.nlrb.gov, click on "e-file documents," enter the 10-digit case number on the complaint (the first number if there is more than one), and follow the prompts. You will receive a confirmation number and an e-mail notification that the documents were successfully filed.

Although this matter is set for trial, this does not mean that this matter cannot be resolved through a settlement agreement. The NLRB recognizes that adjustments or settlements consistent with the policies of the National Labor Relations Act reduce government expenditures and promote amity in labor relations and encourages the parties to engage in settlement efforts.

I. BEFORE THE HEARING

The rules pertaining to the Board's pre-hearing procedures, including rules concerning filing an answer, requesting a postponement, filing other motions, and obtaining subpoenas to compel the attendance of witnesses and production of documents from other parties, may be found at Sections 102.20 through 102.32 of the Board's Rules and Regulations. In addition, you should be aware of the following:

• Special Needs: If you or any of the witnesses you wish to have testify at the hearing have special needs and require auxiliary aids to participate in the hearing, you should notify the Regional Director as soon as possible and request the necessary assistance. Assistance will be provided to persons who have handicaps falling within the provisions of Section 504 of the Rehabilitation Act of 1973, as amended, and 29 C.F.R. 100.603.

• Pre-hearing Conference: One or more weeks before the hearing, the AU may conduct a telephonic prehearing conference with the parties. During the conference, the AU will explore whether the case may be settled, discuss the issues to be litigated and any logistical issues related to the hearing, and attempt to resolve or narrow outstanding issues, such as disputes relating to subpoenaed witnesses and documents. This conference is usually not recorded, but during the hearing the AU or the parties sometimes refer to discussions at the pre-hearing conference. You do not have to wait until the prehearing conference to meet with the other parties to discuss settling this case or any other issues.

II. DURING THE HEARING

The rules pertaining to the Board's hearing procedures are found at Sections 102.34 through 102.43 of the Board's Rules and Regulations. Please note in particular the following:

• Witnesses and Evidence: At the hearing, you will have the right to call, examine, and cross-examine witnesses and to introduce into the record documents and other evidence.

• Exhibits: Each exhibit offered in evidence must be provided in duplicate to the court reporter and a copy of each of each exhibit should be supplied to the AU I and each party when the exhibit is offered

(OVER)

Form NLRB-4668 (6-2014)

in evidence. If a copy of any exhibit is not available when the original is received, it will be the responsibility of the party offering such exhibit to submit the copy to the All before the close of hearing. If a copy is not submitted, and the filing has not been waived by the All, any ruling receiving the exhibit may be rescinded and the exhibit rejected.

• Transcripts: An official court reporter will make the only official transcript of the proceedings, and all citations in briefs and arguments must refer to the official record. The Board will not certify any transcript other than the official transcript for use in any court litigation. Proposed corrections of the transcript should be submitted, either by way of stipulation or motion, to the All for approval. Everything said at the hearing while the hearing is in session will be recorded by the official reporter unless the All specifically directs off-the-record discussion. If any party wishes to make off-the-record statements, a request to go off the record should be directed to the AU.

• Oral Argument: You are entitled, on request, to a reasonable period of time at the close of the hearing for oral argument, which shall be included in the transcript of the hearing. Alternatively, the AU J may ask for oral argument if, at the close of the, hearing, if it is believed that such argument would be beneficial to the understanding of the contentions of the parties and the factual issues involved.

• Date for Filing Post-Hearing Brief: Before the hearing closes, you may request to file a written brief or proposed findings and conclusions, or both, with the All. The AU J has the discretion to grant this request and to will set a deadline for filing, up to 35 days.

III. AFTER THE HEARING

The Rules pertaining to filing post-hearing briefs and the procedures after the AU J issues a deciiron are found at Sections 102.42 through 102.48 of the Board's Rules and Regulations. Please note in particular the following:

• Extension of Time for Filing Brief with the AU: If you need an extension of time to file a post-hearing brief, you mist fnllow Section 102.42 of the Board's Rules and Regulations, which requires you to file a request with the appropriate chief or associate chief administrative law judge, depending on where the trial occurred. You must immediately serve a copy of any request for an extension of time on all other parties and furnish proof of that service with your request. You are encouraged to seek the agreement of the other parties and state their positions in your request.

• AL's Decision: In due course, the AU J will prepare and file with the Board a decision in this matter. Upon receipt of this decision, the Board will enter an order transferring the case to the Board and specifying when exceptions are due to the All's decision. The Board will serve copies of that order and the AL's decision on all parties.

• Exceptions to the AL's Decision: The procedure to be followed with respect to appealing all or any part of the AL's decision (by filing exceptions with the Board), submitting briefs, requests for oral argument before the Board, and related matters is set forth in the Board's Rules and Regulations, particularly in Section 102.46 and following sections. A summary of the more pertinent of these provisions will be provided to the parties with the order transferring the matter to the Board.

EXHIBIT B

UNITED STATES OF AMERICA NATIONAL LABOR RELATIONS BOARD

CASE NO. 12-CA-169912

KENT SECURITY OF NAPLES, INC. dibla KENT SECURITY and KENT SECURITY SERVICES, INC.,

and

RONALD FERRELL, an Individual

RESPONDENTS' ANSWER AND AFFIRMATIVE DEFENSES

Respondents, KENT SECURITY OF NAPLES, INC., and KENT SECURITY

SERVICES, INC., through their counsel, BLUEROCK LEGAL, P.A., hereby files and

serves this Answer and Affirmative Defenses. The numbered paragraphs herein

correspond to the numbered paragraphs of the Complaint.

1. Respondents admit that Ronald Ferrell filed charges and amended charges

with the Board and that such charges were served on Respondent. Respondent is without

knowledge or information sufficient to form a belief as to the dates the charges were filed

and, therefore, Respondent denies the remaining allegations in paragraph 1.

2. Respondents deny that Kent of Naples, Inc., is a "subsidiary of

Respondent Kent Security." Respondents admit the remaining allegations in paragraph

2(a). Respondents admit that Respondent Kent of Naples, Inc., provided services valued

in excess of $50,000.00 in the prior 12 months. Respondents are without knowledge or

information as to the remaining allegations of paragraph 2(b) and, therefore, deny said

I BlueRock Legal, P.A. - 10800 Biscayne Boulevard, Suite 410, Miami, Florida 33161

allegations. Respondents admit the allegations contained in paragraph 2(c) of the

Complaint.

3. Respondents admit the allegations in paragraph 3(a) of the Complaint.

Respondents admit that Respondent Kent Security Services, Inc., provided services

valued in excess of $50,000.00 in the prior 12 months. Respondents are without

knowledge or information as to the remaining allegations of paragraph 3(b) and,

therefore, deny said allegations. Respondents admit the allegations contained in

paragraph 3(c) of the Complaint.

4. Respondents deny that Guillermo Lanza is "Branch Manager" but admit

the remaining allegations in paragraph 4 of the Complaint.

5. Respondents admit the allegations of paragraph 5(a) of the Complaint, and

further aver that the Agreement provides in relevant part as follows:

B. Exclusions. Notwithstanding the foregoing, nothing in this Agreement shall prevent Employee or Kent Security, as the case may be, from applying for, or receiving, temporary injunctive relief from a court of competent jurisdiction in aid of arbitration or for the maintenance of the status quo pending arbitration. Nothing in this Agreement shall prevent or restrict any employee's right to file a charge with any government agency or right to participate in any investigation by any government agency.

Respondents admit the allegations contained in paragraph 5(b) of the Complaint.

Respondents deny the allegations contained in paragraph 5(c) of the Complaint.

6. Respondents deny the allegations contained in paragraph 6 of the

Complaint.

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BlueRoek Legal, P.A. - 10800 Biscayne Boulevard, Suite 410, Miami, Florida 33161

7. Respondents deny the allegations contained in paragraph 7 of the

Complaint. In response to the unnumbered ad damnum clause following paragraph 7,

Respondents deny that the Board is entitled to the relief alleged therein.

WHEREFORE, having fully answered the Complaint, Respondents request that

the Complaint be dismissed in its entirety.

BLUEROCK LEGAL, P.A. Counsel for Respondents 10800 Biscayne Boulevard, Suite 410 Miami, FL 33161 Phone: (305) 981-4300 Fax: (305) 981-4304 E-mail: thenryb1uerocklegal.com

Frank y Florida Bar No. 956554

CERTIFICATE OF SERVICE

I hereby certify that I filed this document at www.nlrb.gov and served this

document via United States Mail on each person identified on the attached Service List

on July?, 2016.

FrankH.H -

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BlueRock Legal, P.A. • 10800 Biscayne Boulevard, Suite 410, Miami, Florida 33161

SERVICE LIST

Ronald Ferrell 3409 Goldie Lane Naples, FL 34112-6231

Margaret J. Diaz, Regional Director National Labor Relations Board, Region 12 201 E. Kennedy Blvd., Suite 530 Tampa, FL 33602-5 824

Frank1M{iifr

BlueRock Legal, P.A. 10800 Biscayne Boulevard, Suite 410, Miami, Florida 33161

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