Ninth Circuit Enforces Arbitration Class Waiver


Since the 2011 United States Supreme Court decision in AT&T Mobility v. Concepcion, appellate courts have assessed whether arbitration clauses with class action waivers are enforceable.  Concepcion said yes and most courts have followed that precedent.  The Ninth Circuit in Richards v. Ernst & Young on August 21, 2013 also followed the majority of the case law and held that Ernst & Young’s arbitration agreement, which provided for a waiver of class action claims, was enforceable.  The Ninth Circuit held that the individual claims must be arbitrated and they vacated the district court’s order certifying a class of plaintiffs with Richards as the class representative.

The Ninth Circuit specifically rejected Richards’ attempt to use the National Labor Relations Board’s decision in D.R. Horton (2012) as justification to find the waiver unenforceable.  In D.R. Horton, the NLRB found that a class action waiver in an arbitration agreement violates the employees’ right to engage in concerted, protected activity by joining in a collective action.  The NLRB continues to follow this precedent in recent decisions and is waiting for the United States Supreme Court to specifically overturn D.R. Horton.  Meanwhile, the Board and the NLRB’s Administrative Law Judges follow the precedent of DR Horton that is contrary to the Concepcion decision by the Supreme Court.  This is another example of the Board having an agenda contrary to the interests of most employers.


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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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