In a blow to employers, on August 22, 2016 in Morris v. Ernst & Young, the Ninth Circuit held that class action waivers are unenforceable in California. Deferring to the opinion given by the National Labor Relations Board (“NLRB”), the Court said that since the National Labor Relations Act (“the Act”) gives employees the right to seek to improve working conditions by initiating a lawsuit or some other type of action against their employer, and also provides that employees may act together or “in concert” for the purpose of collective bargaining or other mutual aid or protection, class action waivers are not enforceable.
Thus, the Act establishes the right of employees to pursue work-related legal claims, and to do so together. (Meaning as a class.)
This decision severely limits an employer’s ability to prevent class actions. Even where an employee signs a valid arbitration agreement, employees will likely be able to proceed in arbitration as a class instead of arbitrating their claims individually.
COUNSEL TO MANAGEMENT:
If you have questions regarding how your arbitration agreement may be vulnerable in light of the Morris decision, please contact the experts at the Saqui Law Group.