Ninth Circuit Joins Second and Eighth Circuits in Rejecting D.R. Horton

by Snell & Wilmer

Recently, in Richards v. Ernst & Young, No. 11-17530, 2013 WL 4437601 (9th Cir. August 21, 2013), the Ninth Circuit joined two other federal circuits, the Second and the Eighth, in rejecting the application of the National Labor Relations Board’s (“NLRB”) decision of In re D.R. Horton, 357 N.L.R.B. No. 184, 2012 WL 36274 (Jan., 3, 2012).

In D.R. Horton, the NLRB invalidated an arbitration agreement requiring an employee to waive class arbitration because it purportedly violated the National Labor Relations Act by infringing the employee’s right to seek collective action. The Second and Eighth Circuits declined to apply D.R. Horton in cases where the parties alleged arbitration agreements containing class action waivers violated the Fair Labor Standards Act (“FLSA”) in Sutherland v. Ernst & Young LLP, No. 12-00304, 2013 WL 4033844 (2d Cir. Aug. 9, 2013), and Owen v. Bristol Care Inc., 702 F.3d 1050 (8th Cir. 2013), respectively. In both cases, the two appellate courts held that the terms of arbitration agreements must be rigorously enforced, unless a contrary congressional command rendered class arbitration invalid under FLSA. As Congress did not expressly prohibit these waivers when it enacted FLSA, the Second and Eighth Circuits upheld the arbitration agreements.

The Ninth Circuit followed suit in Richards. After determining Richards incurred no prejudice by Ernst & Young’s late claim for arbitration, the Ninth Circuit denied application of D.R. Horton for two reasons. First, the Ninth Circuit refused to entertain Ms. Richards’ claim that D.R. Horton prohibited the enforcement of the arbitration agreement because she failed to make this argument in the district court. Second, even if properly before the Court, the Ninth Circuit noted that D.R. Horton was not applicable because Congress did not expressly override any provision in the Federal Arbitration Act to prohibit class action waivers when it enacted the National Labor Relations Act or the Norris-LaGuardia Act.

To evidence the stark contrast between the application of D.R. Horton by the federal courts and the NLRB, the NLRB denied a similar provision included in employment agreements of JP Morgan Chase on the same day the Ninth Circuit issued Richards. Although the Administrative Law Judge acknowledged that federal district courts and the Eighth Circuit rejected its application, he held he must follow D.R. Horton “unless and until it is overturned by the Supreme Court or reversed by the Board itself.”  

Currently, D.R. Horton is on appeal before the Fifth Circuit. Although oral arguments were heard in February 2013, D.R. Horton continuously updates the Fifth Circuit to alert it of federal district and appellate courts’ refusal to apply D.R. Horton in similar instances. Whether the Fifth Circuit follows its sister appellate courts, and overrules D.R. Horton, or affirms the same, the Supreme Court may be asked to weigh in on this issue depending on the NLRB’s stance after the Fifth Circuit’s decision.

Under Richards, Courts will enforce mandatory arbitration clauses or agreements, even years after litigation commenced, as long as no prejudice occurred to plaintiff. Most importantly, federal courts recognize the rights of parties to limit future liability by agreement. Experienced employment counsel can assist in drafting or reviewing your employment agreement to potentially minimize exposure to future employment and class action claims.

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.

© Snell & Wilmer | Attorney Advertising

Written by:

Snell & Wilmer

Snell & Wilmer on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.