In an important decision for workers seeking to join together to enforce their employment rights, the Ninth Circuit Court of Appeals ruled in Morris v. Ernst & Young (https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/22/13-16599.pdf) that employers can not impose concerted action waivers in mandatory arbitration agreements. The Ninth Circuit held that employers violate Sections 7 and 8 of the National Labor Relations Act (“NLRA”) by requiring employees to waive their right to participate in “concerted activities” such as class and collective actions. With Morris, the Ninth Circuit joins the Seventh Circuit (Lewis v. Epic Systems Corp., 823 F.3d 1147 (7th Cir. 2016)), which was the first federal Circuit Court to adopt the National Labor Relations Board (“NLRB”) position in D.R. Horton, Inc., 357 NLRB No. 184 (2012).
In Morris, employees filed a class and collective action alleging that their employer had misclassified certain employees as exempt from overtime in violation of the Fair Labor Standards Act (“FLSA”) and California labor laws. These employees were required to sign agreements that had a “concerted action wavier” that required them (1) to pursue legal claims against Ernst & Young exclusively through arbitration, and (2) to arbitrate as individuals in “separate proceedings.”
The Court explained that: