Widening a growing split among the federal appeals courts regarding the legality of a class action waiver contained in an arbitration agreement, the U.S. Court of Appeals for the Ninth Circuit has ruled that such a waiver is incompatible with the “substantive right” of employees to engage in protected concerted activity for their mutual aid and protection under the National Labor Relations Act (NLRA). The decision puts the Ninth Circuit on the same side as the Seventh Circuit, and at odds with the Second, Fifth, and Eighth Circuits.
Ruling in Morris, et al. v. Ernst & Young, LLP, No. 13-16599 (9th Cir. Aug. 22, 2016), the Ninth Circuit found that the ability of employees to collectively “pursue work-related legal claims” is an extension of their right to engage in concerted activity. According to the court, an employer’s attempt to contractually restrict such activities amounts to a violation of the NLRA.
In endorsing the position staked out by the National Labor Relations Board (NLRB) in its controversial 2012 administrative ruling in D.R. Horton, which held that arbitration agreements containing class waivers categorically violate the NLRA, the Ninth Circuit has increased the odds that the issue will have to be resolved by the Supreme Court.
A copy of the Ninth Circuit’s decision in Morris is available here.
Members of the Equal Employment Advisory Council (EEAC) can read more here.